Appellate court upholds fraud conviction of crypto founder Randall Crater

In a recent development in crypto-related legal proceedings, the United States Court of Appeals for the First Circuit has upheld the conviction of Randall Crater, the founder of My Big Coin, a cryptocurrency project. Crater was found guilty of multiple charges, including wire fraud, unlawful monetary transactions, and operating an unlicensed money-transmitting business.

Upholding conviction

A three-judge panel comprising Judges Gustavo Gelpí, Jeffrey Howard, and Julie Rikelman affirmed Crater’s conviction, dismissing arguments presented by his legal team. Crater’s defense had contended that his Sixth Amendment rights were violated due to the court’s handling of witnesses and the inclusion of testimony from a crypto expert, Pamela Clegg, vice president of financial investigations at CipherTrace. However, the appellate judges found no merit in these claims, stating that Crater was not entitled to a new trial.

According to the appellate filing, CipherTrace’s investigation revealed crucial information undermining Crater’s claims about My Big Coin. The investigation disclosed that the project was not associated with a public blockchain, a fundamental characteristic of cryptocurrencies, until June 2017, after Crater marketed it.

Background of the case

Randall Crater founded My Big Coin in 2013, falsely portraying it as a cryptocurrency payment service. Through deceptive marketing tactics, Crater managed to amass approximately $7.6 billion from 55 victims between 2014 and 2017. He falsely asserted that the platform’s tokens were backed by gold and claimed a partnership with Mastercard for a user credit card.

In February 2019, the Justice Department initiated criminal charges against Crater, culminating in his conviction in January 2023. Subsequently, Crater was sentenced to 100 months in prison and ordered to pay over $7.6 million in restitution to victims. Prosecutors revealed that Crater used illicit gains to acquire assets such as a home, cars, and antiques.

Ongoing legal landscape in the crypto space

Crater’s case is part of a broader trend where U.S. authorities actively pursue criminal charges against prominent figures in the cryptocurrency industry. Notable individuals facing legal scrutiny include former Binance CEO Changpeng Zhao, former Celsius CEO Alex Mashinsky, and former FTX CEO Sam Bankman-Fried.

Zhao, who pleaded guilty to a felony count, awaits sentencing scheduled for April. Bankman-Fried was convicted of seven counts in November, with sentencing set for March 28. Meanwhile, Mashinsky is awaiting a trial scheduled for September.