Key Takeaways:
- A cryptocurrency trader has been sentenced to up to ten years in prison for scamming investors.
- Jeremy Spence, 25, has pleaded guilty to defrauding investors with his crypto fund scam. Over 170 customers lost more than $5 million as a result of Spence’s various bogus funds, which he managed under false pretenses and promises of up to 148% returns.
Jeremy Spence (aka Coin Signals) pleaded guilty to a fraudulent cryptocurrency investment scheme, according to the U.S. Department of Justice (DOJ)
Spence defrauded over 170 investors out of more than $5 million through a series of fake schemes he ran under false pretenses and promises of up to 148% profits.
Spence received additional funds due to his false statements and was charged in June.
U.S. Attorney Damian Williams stated:
“Jeremy Spence, a/k/a, ‘Coin Signals,’ admitted today to luring investors to his cryptocurrency investment scam by touting fictitious historical returns of up to 148%.”
Spence made several misleading statements, including claiming that his trade is tremendously profitable while it has always been unprofitable.
“To hide his trading losses, Spencer used new investor funds to pay back other investors in a Ponzi-like fashion. In total, Spencer distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors.”
Spencer faces a maximum sentence of ten years in prison, pleading guilty to commodities fraud.
From November 2017 through April 2019, Spence sought investors for multiple bitcoin investment funds that he formed and managed. Coin Signals Bitmex Fund (CS Mex Fund), Coin Signals Alternative Fund (C.S. Alt Fund), and Coin Signals Long Term Fund were his three most prominent and most active funds.
According to U.S. Attorney Damian Williams in Jeremy Spence’s case,
“The burgeoning cryptocurrency market can be tempting to investors. However, investors should be aware of the inherent risks, including the risk of fraud.”
According to the Department of Justice, investors who wished to join in a fund would send cryptocurrencies such as bitcoin and ethereum to Spence, who would then invest it.
According to the DOJ, Spence scammed new investor funds to pay back other investors in a Ponzi-like method to disguise his trading losses, who added that he “distributed bitcoin valued about $2 million to investors substantially from funds previously deposited by other investors.”
Spencer, 25, pleaded guilty to commodities fraud, a felony punishable by ten years in jail. The maximum possible punishment is set by Congress and is offered here solely for informative purposes, as the judge will determine the defendants’ sentences. Judge Kaplan is expected to sentence SPENCE at a later date.
