In a landmark case for the cryptocurrency industry, a federal judge has ruled that a cryptocurrency caught in the midst of a lawsuit is a commodity, court documents reveal.
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U.S. District Judge for Massachusetts Rya Zobel has decided that the suit’s prosecuting party — the Commodity Futures Trading Commission (CFTC) — can proceed with its case against My Big Coin Pay Inc. as its cryptocurrency My Big Coin (MBC) does not fall into the category of a security.
My Big Coin was founded in December of 2013. Allegedly based in Wyoming, the company offers its own digital wallet to store cryptocurrencies and a digital exchange to trade them. My Big Coin began selling its own currency — MBC — through an initial coin offering (ICO) and made approximately $6 million from 28 separate investors by promising 1 percent interest per year[2] to investors that kept their wallets open.
The CFTC claims that the ICO has all the same behavior and qualities of a Ponzi scheme. They allege that the company is based in Las Vegas, not Wyoming, and that owners Randall Crater of New York and Mark Gillespie of Michigan used customer funds to purchase expensive items for themselves.
In addition, the CFTC believes the money was raised through several false claims, including that MBC was backed by gold and traded across several different exchanges, and that My Big Coin had recently struck a partnership with MasterCard.
Charges were filed back in January of 2018. The company’s accounts were frozen, and executives were blocked from accessing them. They were also prohibited from disposing of any financial records.
According to court documents, Judge Zobel believes that MBC classifies as a commodity because it is a cryptocurrency like bitcoin:
“The
