The Rise of Cryptocurrency Fraud: Recent Cases Highlight Investor Risks
Recent headlines have been dominated by cases of fraud in the world of cryptocurrency, shedding light on the risks investors face in this rapidly evolving industry. Two recent cases in the US have brought to light the dangers of investing in technology companies, particularly those dealing with cryptocurrency.
My Big Coin Pay Founder Faces Charges for Fraudulent Scheme
Randall Crater, the founder of My Big Coin Pay, is facing multiple charges of fraud after allegedly deceiving investors and misappropriating funds. The indictment filed in the District of Massachusetts accuses Crater of four counts of wire fraud and three counts of unlawful monetary transactions.
The charges stem from Crater’s creation and marketing of My Big Coins, a gold-backed currency that he claimed was backed by $300 million in gold. However, investigations revealed that the Coins were not backed by any valuable assets and were not easily transferable. Along with his co-founder Mark Gillespie, Crater is accused of misappropriating around $6 million in investor funds.
Crater allegedly spent $500,000 of the stolen funds at a New York auction house on various luxury items, further highlighting the extent of the fraudulent scheme. The scam reportedly ran from 2014 to 2017, during which time Crater built websites and social media accounts to lend credibility to the company.
Multi-Million Dollar Investment Fraud Scheme Involving Fintech Start-Up
In a separate case, Michael A. Liberty and Paul Hess were charged with a conspiracy to commit wire fraud, wire fraud, and securities fraud in connection with their fintech start-up, Mozido. The duo allegedly diverted investor funds to their personal bank accounts after raising millions for the mobile payments company.
These cases serve as a stark reminder of the risks associated with investing in technology companies, particularly in the volatile world of cryptocurrency. With fraudsters ready to take advantage of industry hype, investors must exercise caution and due diligence before committing their funds.
As regulatory bodies continue to crack down on fraudulent schemes in the cryptocurrency space, it is essential for investors to stay informed and vigilant to protect their assets.