Man accused of cheating investors in cryptocurrency scam

Prosecutors: Suspect sold fake virtual money he claimed was backed by gold

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BOSTON – The founder of a purported cryptocurrency company has been charged with cheating investors out of millions of dollars by selling fake virtual money he falsely claimed was backed by gold.

Federal prosecutors in Massachusetts say My Big Coin Pay Inc. founder Randall Crater of East Hampton, New York was arrested Wednesday and charged with wire fraud and money laundering.

Prosecutors say Crater and his associates fooled investors into believing that "My Big Coins" or "Coins" could be exchanged for government-backed paper currency when they actually had little to no actual value.

They say Crater also spent more than $6 million from investors for jewelry, artwork and other personal purchases.

Ray Chandler, an attorney for Crater, said Crater denies all the allegations against him. Chandler said Crater "is not a thief."