My Big Coin Founder Fails to Overturn Conviction for Cryptocurrency Scam
On Friday, February 23, 2024, the United States Court of Appeals for the First Circuit affirmed the conviction of Randall Crater, an entrepreneur involved in a cryptocurrency scam.
Crater was found guilty by a jury in the United States District Court for the District of Massachusetts on eight counts related to wire fraud, money laundering, and operating an unlicensed money-transmitting business. The charges stemmed from Crater’s role in launching My Big Coin (MBC), a purported cryptocurrency, in 2013.
Prosecutors alleged that Crater made false claims to mislead investors and customers into purchasing MBC coins. Specifically, Crater promoted that MBC was backed by gold reserves worth hundreds of millions of dollars and had a partnership with Mastercard that would allow coin holders to make purchases. However, the government presented evidence at trial that MBC was not associated with any public blockchain like other cryptocurrencies and that Crater’s claims about gold backing and the Mastercard deal were fabricated.
Despite being unable to sell or spend their MBC coins as promised, the victims invested over $7.5 million in the currency based on Crater’s representations. The government argued these actions constituted wire fraud and other financial crimes. Crater maintained his innocence and appealed his conviction to the First Circuit.
On appeal, Crater challenged two of the district court’s rulings during his trial. First, he argued that the lower court violated his Sixth Amendment right to compulsory process by refusing to enforce subpoenas he issued to three federal agency witnesses. The district court had declined to compel the witnesses based on Crater’s failure to comply with the agencies’ internal regulations and found the sought testimony was irrelevant.
Second, Crater contended the district court improperly admitted expert testimony on cryptocurrencies without first holding a Daubert hearing to assess the witness’s qualifications and methods. However, the First Circuit upheld both of the district court’s decisions. The Appeals Court found that controlling precedent did not support Crater’s compulsory process argument and that the district court had adequately fulfilled its “gatekeeping role” in evaluating the expert.
As a result, the First Circuit affirmed Crater’s conviction in full, concluding there were no grounds to overturn the jury’s verdict or require a new trial. The appeals court decision deals another legal blow to Crater as he continues serving his 100-month prison sentence handed down last year for his role in the cryptocurrency scheme.
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