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New York man convicted in cryptocurrency fraud scheme

July 22, 2022 GMT

BOSTON (AP) — The founder of a cryptocurrency and virtual payment services company has been convicted by a federal jury of defrauding investors out of $6 million and spending some of the money on antiques, artwork and jewelry.

Randall Crater, 51, of East Hampton, New York, was convicted in federal court in Boston on Thursday of wire fraud, unlawful monetary transactions, and operating an unlicensed money transmitting business, the U.S. attorney’s office in Boston said.

Crater founded Las Vegas-based My Big Coin Pay Inc. in 2013, offering virtual payment services through the digital currency, “My Big Coins,” which he marketed to investors between 2014 and 2017, prosecutors said.

Crater and his associates said the coins were a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets, said the company had a partnership with MasterCard, and said the currency could readily be exchanged for government-backed paper currency or other virtual currencies, when in reality, none of that was true, prosecutors said.

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Crater misappropriated more than $6 million of investor funds, authorities said.

“Mr. Crater saw the burgeoning popularity of crypto as a chance to get rich quick through an unscrupulous fraud scheme cloaked by flashy marketing tactics and outright lies,” U.S. Attorney Rachael Rollins said.

Sentencing was scheduled for Oct. 27.