$6MN CRYPTOCURRENCY ‘PONZI SCHEME’ LEADS TO FEDERAL FRAUD CASE

In 2014, the company posted a tweet that said they had partnered with MasterCard and were “the only cryptocurrency to back your money with gold.”

The defendants even issued a press release that stated the company partnered with TRUCASH to implement a “customized branded prepaid mastercard program” insinuating customers could spend the cryptocurrency anywhere MasterCard was accepted.

The defendants also allegedly changed the price of the cryptocurrency “arbitrarily” to make it seem as though it fluctuated in order to entice customers to buy. According to Facebook posts, the company inflated the price of MBC from $23.64 USD on January 23, 2014 to $121.38 USD on November 8, 2014.

A classic version of the My Big Coin website also claims that “any customer with a valid email account” could send or receive money using MBC. However, the complaint states that customers “could not exercise any ownership right in relation to their MBC because they could not trade their MBC or withdraw funds from their individual accounts.”

The defendants allegedly encouraged their customers to keep their holdings in the company and provided additional coins to any customers who raised question about their accounts.

“To the extent any MBC customers received any funds from the defendants, those funds in fact consisted of funds that defendants misappropriated from other MBC customers, in the nature of a Ponzi scheme,” the complaint reads.

In total, the defendants raised $6 million from 28 customers through false claims.

via $6mn Cryptocurrency ‘Ponzi Scheme’ Leads to Federal Fraud Case | The Daily Sheeple