The court of Massachusetts has identified a case of fraud with tokens under the jurisdiction of the CFTC
A judge of the Federal district court of Massachusetts RIA V. Sobel (Rya W. Zobel) on Wednesday decided that the cryptocurrency token of My Big Coin Pay, the creators of which are accused of fraud and manipulating the price, corresponds to the definition of the exchange of goods in connection with which this case falls under the jurisdiction of the Commission on trade commodity futures (CFTC). This was reported today by the newspaper Finance Feeds.
CFTC sued on IT-entrepreneur Randall Kreiter (Randall Crater) and other individuals associated with his firm. The reason for the prosecution to manipulate investors. The regulator believes that the businessman is encouraged to buy a token of My Big Coin (MBC) giving false information for the truth. Crater has convinced investors that the token backed by gold and actively traded on various cryptocurrency exchanges. A total of 28 people were injured, which together gave the company $ 6 million.
The defendants also are accused of manipulating the price of the token MBC with the aim to create an artificial exchange rate fluctuations in cryptocurrency investors who after purchasing the coins, presumably, could not even it out, or trade personally, was available only to watch the price change on the website of fraudsters.
Lawyers Kreiter wanted to dismiss the CFTC, stating that the token client does not fall under the jurisdiction of the regulator, because it is not a physical product or service and it can not enter into a futures contract. Crater, within the protection also compared your token with bitcoin.
But despite this, the judge denied the motion of defendants to dismiss the case against them, explaining that virtual currencies are commodities under the CEA.
“MBC and bitcoin (BTC) is a virtual currency which is currently used in contracts for future delivery. The definition of “a commodity” in relation to the Law on commodity exchanges more than just the type or brand of this commodity”.
In the end, the judge concluded:
“In the amended claims that My Big Coin is a virtual currency. So it will be lawful to conclude that My Big Coin is a commodity”.
In addition, the evidence regarding its decision Zobel the judge also referred to the decision
similar cases the decision on which was handed down in March. Then the judge at the Federal district new York court Jack B. Weinstein (Jack B. Weinstein) held that the CFTC has the authority to regulate commercial transactions allegedly fraudulent cryptocurrency scheme that is associated with the firm CabbageTech.
The Weinstein ruling confirmed the legality of actions for regulation of bitcoin from the CFTC. Also, this decision became the Foundation for the trial in August, which was brought against the resolution on a total ban of activities CabbageTech.