New York crypto trader faces 10 years for $5M Coin Signals Ponzi scheme
The 25-year-old behind $5-million crypto Ponzi scheme Coin Signals faces up to 10 years in jail after pleading guilty to defrauding more than 170 investors.
Between November 2017 and April 2019, Jeremy Spence told investors he was making close to 150% in monthly returns from several cryptocurrency investment funds.
In reality, he operated at a loss. Spence made false representations to clients about the performance of his investments and used $2 million in misappropriated crypto to pay ‘profits’ to investors.
The US Department of Justice (DoJ) announced on Tuesday that Spence entered a guilty plea to commodities fraud, which carries a maximum 10-year sentence.
“The bourgeoning cryptocurrency market can be attractive to investors; however, investors should be aware of the inherent risks, including the risk of fraud,” said US Attorney Damian Willams in a DoJ release.
Coin Signals tricked investors via group chat
From his home in Rhode Island, Spence spent 17 months peddling fraudulent investment schemes to clients. He used falsified assets under management to bolster his claims of wild profits.
Spence accepted contributions in Bitcoin and Ether to be invested across three funds that made up Coin Signals.
According to authorities, his largest and most active was the Coin Signals Bitmex Fund, known to unwitting investors as the CS Mex Fund.
Spence doctored account balances and posted them in a group chat.
In January 2018, he posted a message that he generated returns upwards of 148% in a month. In reality his funds made a net loss across the same period.
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The Feds finally caught up with Spence in January this year after an investigation by the FBI and the Commodities Fraud Task Force.
He was charged in January with one count of commodities fraud and one count of wire fraud, which carry a maximum sentence of 10 and 20 years respectively.
Spence’s guilty plea to commodities fraud has yet to be sentenced by a judge. The DoJ’s latest statement omits a wire fraud plea.
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