A federal judge ruled that the MBC is the ultimate cryptocurrency to be classified as a commodity. In a recent case against My Big Coin Pay Inc, the company that issued the currency, US District Judge Rya Zobel has decided that the criminal prosecution, the Commodity Futures Trading Commission (CFTC), may proceed with its lawsuit against cryptocurrency as a digital asset does not fall into the "securities" category.
A bit of history
My Big Coin was founded in December 2013. Presumably based in Wyoming, the company offers its digital portfolio to store cryptocurrencies and a digital stock market. My Big Coin started selling its own currency – MBC – through an initial offer of coins (ICO) and collected about $ 6 million from 28 separate investors promising a 1% interest for investors who they kept their wallets open.
The CFTC states that ICO has the same behavior and the same qualities as a Ponzi scheme. They claim that the company is based in Las Vegas, not in Wyoming, and that the owners Randall Crater of New York and Mark Gillespie of Michigan have used the funds of customers to buy expensive items for themselves. They also state that both money from new investors was used to repay the older ones.
Honesty is the best policy
In addition, the CFTC believes that the money was collected through several false claims, such as that MBC was supported by gold and traded through various exchanges and that My Big Coin had recently collaborated with MasterCard. The charges were filed in January 2018. The company's accounts were frozen and managers were prevented from accessing it. Furthermore, they were forbidden to have any financial documentation.
Through court documents, Judge Zobel believes that MBC classifies as a commodity because it is a cryptocurrency like bitcoin:
"The amended claim states that My Big Coin is a virtual currency, and it is clear that there are futures exchanges in virtual currencies (especially with bitcoins) .This is sufficient, especially in the proclamation phase, that plaintiff alleges that My Big Coin is a "commodity" [Commodity Exchange] Act. "
The defendant continues to discuss
My Big Coin defense attorney Katherine Cooper has expressed his disappointment at the decision and continues to claim that the CFTC does not take precedence. In court documents, he claims that "the contracts for future delivery" are not "treated" My Big Coin. Therefore, the currency can not be classified as a commodity under the Court of Auditors:
"My Big Coin has no future contracts or derivatives that exchange it, it is not a commodity Now that we are passing the motion to reject the appropriate phase, we are not looking forward to challenging the CFTC's ability to try many of the factual accusations in the denunciation Among these statements of fact there are those that speak of the kinship of bitcoin and My Big Coin, and therefore of the jurisdiction of the CFTC. "
The problem is not over
The definition of cryptographic tokens has not always been an easy undertaking for US lawmakers and the lack of clear regulation continues to persecute numerous major cryptocurrencies. Ethereum, for example, initially started as a pre-sale token, and has been the subject of heated debate for several months. Many believed that the Securities and Exchange Commission (SEC) would have declared Ethereum a security, given its ICO background, although in a shock, the organization believed that Ethereum was "too decentralized" to be classified as such.
Ripple, on the other hand, was not so lucky. Chief Executive Brad Garlinghouse has consistently asked major US stock exchanges such as Coinbase to list XRP, the organization's cryptocurrency, although it has usually been disappointed. Coinbase and other exchanges are in no hurry to list XRP given the possibility that it will be labeled a security in the future. About 60% of XRP is still owned by Ripple, which suggests a centralized atmosphere for the currency.
In addition, the company is facing a class action lawsuit by investors claiming that XRP has not followed appropriate security protocols.