United States Securities and Exchange Commission (SEC) charged a cryptocurrency trader for allegedly being involved in a ponzi scheme defrauding more than $5 million from over 170 investors. The accused, Jeremy Spence, who goes by the name “Coin Signals,” was charged in Manhattan Federal Court for “soliciting funds” for various crypto funds that he operated.
Federal authorities claimed that Spence operated a Ponzi scheme and that his offenses include “commodities fraud and wire fraud.” According to SEC, investors transferred Bitcoin and Ethereum to Spence, so that he could invest the assets on their behalf.
Federal Bureau of Investigations (FBI) Assistant Director-in-Charge William Sweeney Jr claimed that Spence enticed investors by giving them false information about the “success of his investment platform.” The trader allegedly used money from new investors to pay off others in order “to keep his plan moving” which the FBI Director said was “a typical marker of a Ponzi scheme.”
The official complaint read:
Spence solicited investments for several Funds, the largest and most active of which were the Coin Signals Bitmex Fund, a/k/a the “CS Mex Fund,” the Coin Signals Alternative Fund, a/k/a the “CS Alt Fund,” and the Coin Signals Long Term Fund.
Manhattan US Attorney Audrey Strauss alleged that Jeremy Spence lured investors to his crypto “investment scam” by promising returns of up to 148%. The Attorney further said:
Spence’s investments not only failed to reach his audacious claims, they consistently lost money, leaving a $5 million void in his clients’ crypto accounts.
According to the Commission, Spence was arrested this morning in Rhode Island. He could face nearly 30 years in prison if authorities convict him on all charges.