CFTC Charges US Cryptocurrency Ponzi SCAM, UK Based Accomplice Discovered

The Commodity Futures Exchange Commission (CFTC) has charged two people and a Las Vegas-based organization, and Wyoming corporation, with an ICO scam. Additionally we uncovered a sister company involved in London, England.

Randall Crater of East Hampton, New York, Mark Gillespie of Hartland, Michigan, and My Big Coin Pay, Inc. (MBP) allegedly took $6 million customer funds and lined their own pockets for personal use.

In a CFTC statement Director of Enforcement James McDonald said:

“As this case shows, the CFTC is actively policing the virtual currency markets and will vigorously enforce the anti-fraud provisions of the Commodity Exchange Act. In addition to harming customers, fraud in connection with virtual currencies inhibits potentially market-enhancing developments in this area. We caution potential virtual currency customers, once again, that they should engage in appropriate diligence before purchasing virtual currencies.”

The Defendants allegedly misappropriated funds to personal accounts where funds were used to purchase "a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment".

When customers began to suspect foul play, MBP made attempt to "quiet" them by issuing them more unit of MBP coin, a digital asset which isn't traded on any exchange we could find other than NovaExhange with a current value of a whopping 6.4 cents USD.

Shady Sister Company Revealed

The CFTC statement states MBP "misrepresenting that MBC had partnered with MasterCard, with the promise that MBC could be used anywhere MasterCard was accepted, when in fact no such partnership existed and MBC could not be used anywhere MasterCard was accepted"

However, we dug a bit deeper and discovered a London England based company involved in the United Kingdom.

MBP supposedly began in 2013, but shows no activity until 2015 when they partners with a Visa card provider to provide ways to spend their asset. Interestingly enough, the card issuing company, V Card Net Ltd. (VCN), registered in London, England (reg. # 09721530), lists MBP as the only newsworthy item of their existence on their website.

Which is almost always a sign of conflicting interests, so we took a look at VCN and as suspected, it's a sister company of MBC where Randall Crater is a director.

Clearly this company was started for the sole purpose of being an entity that would be supposedly issuing Visa and Mastercard payment cards for MBP. On MBP's website, they state that on January 2015 they "partnered" with VCB to provide this service.

However, VCB didn't even exist at the time. VCB didn't organize as an entity until June of 2015 (See bottom of page above "Date Authorised: 6/08/2015").

How is it they were partnered with VCB and offering payment cards before the payment card provider even existed? Perhaps they traveled back in time?

Moreover. if we look at VCB, the company appears to be a farce itself. Under the card issuers "fee schedule", after being in existence for 2.5 years and supposedly servicing MBP for 3 years, an amazing feat miraculously service their first customer a full 6 months before they even existed, they show that their fees are "coming soon".

What reputable card payment issuer doesn't have an apparent fee schedule? We'll tell you. Zero. 

It's one of the first things customers look at.

Clearly, this is nothing more than a shell company setup to defraud customers into believing something tangible existed whereas in fact it did not.

According to VCN's website, the payment card is:

".. issued by V Card Net Limited pursuant to a license from Visa Europe. Registered Office: 20-22 Wenlock Road, London, N1 7GU."

Which certainly sounds all "official", however, it's bullshit and there's an app for that.

Visa offers a global providers registry of every provider involved with any of it's products and services.

Guess what? There is no "V Card Net", "V Card Net Limited", "V Card Net Ltd.", "V Card", or any other form of the entities name in existence on the registry, in other words, they do not have a license with Visa Europe and they are not authorized to issue any card bearing the Visa logo.

SHOCKER THERE!

They don't even claim to issue Mastercard payment cards despite the fact the "Mastercard logo" is present on their website.

Another individual by the name of Edward White is also listed as an owner of V Card Net, Ltd., and does not appear to be directly associated with MBP. Perhaps the UK has been investigating this further. If not, they may well start now.

The CFTC is seeking monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws, as charged.

You can read the full CFTC report here.

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