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BOSTON, Jan 31 (Reuters) – The founder of a defunct cryptocurrency business was sentenced on Tuesday to more than eight years in prison for defrauding investors and customers out of millions of dollars by marketing a virtual currency called My Big Coin with lies and half-truths.<\/p>\n
Federal prosecutors had urged U.S. District Judge Denise Casper in Boston to impose a 13-year prison term on Randall Crater to send a message to others in the first sentencing of a cryptocurrency company founder for a marketing fraud.<\/p>\n
While Casper concluded that that request went too far, she rejected Crater’s contention that a 30-month prison term was sufficient to punish him for his false claims, including that My Big Coin was a real cryptocurrency backed by gold.<\/p>\n
“Certainly cryptocurrency is a newer enterprise, a newer market, a 21st Century market,” Casper said. “But the scheme at its core was age-old, and that was fraud.”<\/p>\n
Crater, who was sentenced to 100 months in total and ordered to forfeit nearly $7.7 million, is expected to appeal. In court, he apologized but said he never meant to defraud anyone.<\/p>\n
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“I did not set out to steal money from anyone,” he said. “That does not mean I am not remorseful.”<\/p>\n
A jury in July found Crater, 52, guilty<\/a> of committing wire fraud and making unlawful monetary transactions in a prosecution that spilled out of a precedent-setting case by the U.S. Commodity Futures Trading Commission.<\/p>\n The CFTC’s 2018 lawsuit against Crater and his failed company, Nevada-based My Big Coin Inc, led to one of the first court rulings holding that a virtual currency could be considered a commodity within the regulator’s jurisdiction.<\/p>\n Prosecutors subsequently secured Crater’s indictment in 2019 and accused him of causing investors and customers to lose $7.5 million from 2014 to 2017 with lies about My Big Coin, whose name sounded similar to the popular virtual currency bitcoin.<\/p>\n Prosecutors said those false claims included that My Big Coin was a real virtual currency, was backed by gold and had a partnership with MasterCard (MA.N)<\/a>. Prosecutors said he used the money to buy cars, jewelry, artwork and antique coins.<\/p>\n Reporting by Nate Raymond in Boston Our Standards: The Thomson Reuters Trust Principles.<\/a><\/p>\n
\nEditing by Bill Berkrot<\/span><\/p>\n\n<\/p>\n