My Big Coin operators fined $26M for crypto scam, but victims may never be repaid

The masterminds behind My Big Coin have been ordered to pay nearly $26 million in penalties and restitution after a US court found them liable for defrauding investors through a fake cryptocurrency scheme.

According to an official announcement from the regulator, the US District Court for the District of Massachusetts entered a final default judgment against Mark Gillespie, John Roche, My Big Coin Pay, Inc., and My Big Coin, Inc. 

Per the ruling, the parties are required to pay $19.32 million in civil monetary penalties and $6.44 million in restitution to defrauded victims.

The Commodity Futures Trading Commission (CFTC) has confirmed that the court also imposed a permanent ban on trading and registration on the defendants, prohibiting them from participating in any CFTC-regulated markets or entering into transactions involving commodity interests or digital asset commodities.

According to the CFTC’s findings, Gillespie and Roche worked alongside convicted co-defendant Randall Crater to solicit investments in My Big Coin (MBC) while claiming the token was backed by gold and actively traded on established exchanges. 

These representations were false and misleading, and Crater misappropriated most of the investor funds for personal use, the CFTC said. The scheme resulted in losses exceeding $6 million for at least 28 investors.

Unfortunately for the victims, the regulator has warned that they are unlikely to recover their losses, as the defendants may not have sufficient assets.

With the court’s decision, the CFTC has wrapped up its enforcement action against Gillespie, Roche, and the two Nevada-based corporate entities. 

Charges against another named defendant, Michael Kruger, were dropped following his death, while Crater, the central figure in the scheme, had already reached a separate settlement with the CFTC and is currently serving a federal prison sentence.

What is My Big Coin?

My Big Coin was marketed as a fully functioning virtual currency through My Big Coin Pay Inc., which was based in Las Vegas. 

The company offered payment services using its proprietary token, claiming it was backed by tangible assets, including oil and gold, and faked ties to major financial networks like MasterCard.

From 2014 to 2017, Crater and his associates used social media, email, and promotional websites to solicit investor funds. 

They told potential customers that their digital assets could be exchanged seamlessly for fiat or other cryptocurrencies, when in reality, the infrastructure to support such claims never existed.

By 2018, the project had come under the CFTC’s radar with the regulator filing a civil enforcement action alleging violations of the Commodity Exchange Act. 

The case also marked one of the first times a US court recognised a virtual currency as a commodity under the regulator’s jurisdiction.

Crater, who founded the company, was arrested following a grand jury indictment in 2022 and was convicted in July that year on multiple counts, including wire fraud, unlawful monetary transactions, and operating an unlicensed money-transmitting business. 

He was sentenced to 100 months in prison in January 2023.