Federal prosecutors have charged a Rhode Island-based cryptocurrency trader for defrauding investors out of $5 million in investments in a Ponzi-like scheme.
On Tuesday, the U.S. Department of Justice said that Jeremy Spence — known as "Coin Signals" allegedly defrauded investors between November 2017 and April 2019. Specifically, Spence is charged with commodities fraud and wire fraud.
"As alleged, SPENCE took cryptocurrency worth over $5 million from more than 170 individual investors after making false representations in connection with these cryptocurrency funds," the DOJ said.
Per the DOJ statement:
"From November 2017 through April 2019, SPENCE solicited investors in various cryptocurrency investment pools that SPENCE had created and managed (the “Funds”). 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. Investors who wanted to participate in a Fund would transfer cryptocurrency, such as Bitcoin and Ethereum, to SPENCE in order for SPENCE to invest it."
“As alleged, Jeremy Spence misrepresented the success of his investment platform in order to entice people to send money his way. Because his trading was less than profitable and significantly less successful than he represented to investors, he used money from new investors to pay off others in order to keep his plan moving—a typical marker of a Ponzi scheme," FBI Assistant Director-in-Charge William Sweeney said in a statement.
If convicted on all charges, Spence faces as many as 30 years in prison.
The Commodities Futures Trading Commission (CFTC) has also charged Spence with fraud in a separate case seeking restitution, permanent trading bans and monetary penalties.
A copy of the sealed complaint can be found below:
u.s. v. Jeremy Spence 21 Mag 880 Complaint by MichaelPatrickMcSweeney on Scribd