The judge of the Massachusetts District Court Rya W. Zobel ruled that My Big Coin Pay Inc. crypto token, whose creators are accused of fraud, is consistent with the definition of the exchange commodity. In this regard, the court case falls within the jurisdiction of the Commodity Futures Trading Commission (CFTC).
My Big Coin Pay is a cryptocurrency company, which, according to the CFTC, is engaged in fraud. The project offers investment services, as well as Internet wallet services for storing electronic currency and digital assets trading. It has its own cryptocurrency MBC, distributed to investors through the ICO, during which more than $6 million was raised.
The CFTC is just blaming the owner of the project, Randall Crater, for the misuse of funds raised from the investors. As follows from the claim to My Big Coin Pay, the funds were spent by the organizers for personal purposes for the purchase of cars and real estate. The money that customers received as a return on investment was taken from newer users of the investment project, which is typical for financial pyramids.
Crater's lawyers tried to reject the CFTC claim, arguing that the client's token does not fall under the regulator's jurisdiction, as this is not a physical commodity and not a service to which a futures contract can be concluded. However, Judge Zobel decided that in this case cryptocurrency can be considered a commodity.
“Here, the amended complaint alleges that My Big Coin is a virtual currency and it is undisputed that there is futures trading in virtual currencies (specifically involving Bitcoin). That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a “commodity” under the Act,” the Judge said.
Recall that last month the New York court approved a lawsuit banning the activities of CabbageTech Corp. from the CFTC. The lawsuit against Patrick K. McDonnell, the founder of CabbageTech Corp., was launched in January of this year and contained charges of fraud and theft of clients' funds under the pretext of acquiring and trading BTC and LTC.
WHY IS IT IMPORTANT?
- My Big Coin's lawyers argued that the CFTC has no right to condemn the company's activities related to the issue and sale of digital currencies since cryptocurrencies are not the exchange commodities.
- However, the U.S. district judge Ray Zobel in the course of the court decided that in this case cryptocurrencies can be considered a commodity. The judge noted that bitcoin (Bitcoin) is traded on stock exchanges and has futures contracts tied to it, therefore it has signs of an exchange commodity, which can be typical for other digital currencies.
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