The Department of Justice of the United States has sentenced a crypto trader popularly called Coin Signals to three and a half years in prison after a crypto fraud worth $5 million with about 170 victims.
After an official press release from the department of justice, the 25-year-old convict from Rhode Island, Jeremy Spence asked investors to participate in different crypto investment pools which lasted for less than two years (November 2017 to April 2019). With this idea, he created different crypto funds with different names like Coin Signals Alternative Fund, Coin Signals Long Term Fund, and Coin Signals BitMEX Fund.
With these funds, Spence promised that he is capable of making an enormous profit from crypto trading which is what prompted investors to send their crypto like $BTC and $ETH to him so that he can trade it on their behalf.
Luring Investors with False Claims
After a while, he sent a message to the online group chat created for the investors that his trading activities with the investors’ funds have generated about 148% profit. This statement prompted some investors to send more funds to him. The statement, however, was pointed out by the DOJ as far from the truth.
In a bid to cover up the fact that he has lost the money in trading, Spence showed the investors false account balances and he used it to keep raising more funds which he used to start a Ponzi scheme.
He practically was using the funds from the new investors to pay the existing ones and he kept up the show for as long as he can. Through the Ponzi scheme, he was able to share a total sum of $2 million in crypto among the investors.
The statement from the DOJ reads, “Instead of giving an accurate report of the losses incurred during trading, SPENCE used false account balances to inform the investors that their investments under him are profitable.”
Jeremy Spence Pleaded Guilty
After the Federal Bureau of Investigation (FBI) made his arrest last year (precisely January 2021), the CFTC – Commodity Futures Trading Commission brought different civil charges against him which he pleaded guilty to them all in November 2021.
After trials and court sessions, Jeremy Spence was sentenced to 42-month imprisonment and in addition, he will be under supervision to return about $2 million to the investors within three years.
