CFTC Accused My Big Coin Operators of Misappropriating More Than $6 Million

The Commodity Futures Trading Commission announced on January 24, 2018 that it had brought a federal civil enforcement action against My Big Coin Pay Inc., founder Randall Crater and solicitor Mark Gillespie. The agency alleged commodity fraud and misappropriation involving more than $6 million collected for a purported virtual currency called My Big Coin, or MBC.

The complaint was filed under seal in the U.S. District Court for the District of Massachusetts on January 16, 2018. Judge Rya W. Zobel issued a temporary restraining order that day freezing assets belonging to the defendants and several relief defendants and preserving books and records. The court docket records that the seal was lifted on January 19; the CFTC made the case public through Release 7678-18 on January 24.

That sequence matters. January 24 was the announcement date, not the filing date or a final adjudication. Every description of misconduct in the event-day record remained an allegation, while the asset freeze was a court-ordered interim measure rather than a finding of liability.

What the regulator alleged

The CFTC said the defendants had solicited customers across the United States from at least January 2014 through January 2018. According to the complaint, promotional materials represented that MBC traded on several exchanges, had an observable daily price, was backed by gold and had a MasterCard partnership that would permit spending wherever MasterCard was accepted.

The agency alleged the opposite on each point: MBC was not trading, no market price existed, there was no gold backing and no MasterCard partnership. It further claimed that payouts to some customers came from money obtained from other customers in the manner of a Ponzi scheme. The complaint said virtually all of approximately $6 million solicited was diverted to purchases including a home, jewelry, art, travel, furniture and entertainment. It also alleged that more than $5 million came from customers in Massachusetts, explaining the venue.

Those figures measure customer funds alleged in the complaint, not MBC market capitalization, exchange volume or investment performance. Because the CFTC asserted that MBC did not trade and had no real daily price, no defensible event-day price or return calculation exists for the instrument.

Why the case mattered

The action showed how the CFTC was trying to apply existing commodities anti-fraud authority to the fast-growing virtual-currency market. The complaint asserted that virtual currencies fell within the Commodity Exchange Act's definition of commodity and charged violations of Section 6(c)(1) and Regulation 180.1(a). The agency sought civil penalties, restitution, rescission, disgorgement, trading and registration bans, and permanent injunctions.

Institutionally, the case was important beyond the amount alleged. It came through the CFTC Division of Enforcement's Virtual Currency Task Force and targeted claims that imitated familiar markers of legitimacy—exchange trading, reserve backing, payments acceptance and quoted prices. The enforcement theory did not depend on proving that MBC was a successful or widely traded network. It treated the solicitation and handling of customer money as the central issue.

The CFTC's filing was still only one side of contested litigation on January 24, 2018. The restraining order protected assets and records while the case proceeded; it did not establish that every allegation was true.

Later context

On September 26, 2018, the same court denied a motion to dismiss and held that the CFTC had sufficiently alleged that MBC was a commodity and that the agency could pursue fraud even without market manipulation. That later ruling clarifies the case's jurisdictional significance, but it was not knowable on January 24 and is not used here as evidence that liability had already been established.