A U.S. judge has sided with the Commodity and Futures Trading Commission (CFTC) in a lawsuit involving an allegedly fraudulent cryptocurrency investment scheme, ruling that the cryptocurrencies involved are commodities for the purpose of the case.
The Commodity and Futures Trading Commission charged two individuals and a Las Vegas-based business called My Big Coin Pay over the alleged cryptocurrency-related scam back in January.
The commission accused the pair, Mark Gillespie and Randall Crater as well as the firm, of taking customer funds and siphoning that money into their personal accounts. Additionally, they allegedly used those funds “for personal expenses and the purchase of luxury goods.”
Subsequently, the defendants filed a motion to dismiss the case on the grounds that the cryptocurrencies involved are not commodities and, as such, the Commodity and Futures Trading Commission has no jurisdiction over the case.
However, Judge Rya W. Zobel from the district court of Massachusetts has now agreed with the counterarguments made by the Commodity and Futures Trading Commission and denied the motion to dismiss on Wednesday. As a result, the case will continue.
Lawyers were watching the decision closely, since a finding in favor of My Big Coin Inc.’s argument to dismiss could have chilled the Commodity and Futures Trading Commission’s ability to police virtual currency frauds.
Judge Rya W. Zobel accepted the Commodity and Futures Trading Commission’s allegations, which have yet to be proven at trial, as true for the purpose of determining if it had jurisdiction.
This case may now move forward as a result of the ruling.
“We are disappointed in the result,” said Crater’s lawyer Katherine Cooper in an email.
“Now that we are moving past the motion to dismiss phase of the case, we look forward to challenging the CFTC’s ability to prove many of the factual allegations in the complaint. Among those factual allegations are those which speak to the relatedness of bitcoin and My Big Coin and therefore the CFTC’s jurisdiction.”