A man is facing three decades behind bars in the United States if convicted of digital currency-related criminal charges. The suspect, Jeremy Spence, is accused of luring at least 170 investors with promises of great returns into his funds but ended up losing the money and conducting a Ponzi scheme. According to the Department of Justice press release, Jeremy Spence faces commodities fraud and wire fraud charges. Better known as Coin Signals, he created and managed a number of cryptocurrency investment pools from November 2017 to April 2019.
Jeremy Spence raised at least $5 million from investors.
Jeremy Spence solicited investment through investment pools, managing to raise at least $5 million. His biggest fund was the Coin Signals BitMEX fund, which he referred to as the “CS Mex Fund,” authorities said. He also created the Coin Signals Alternative Fund and the Coin Signals Long Term Fund. To lure the investors, Spence claimed to be quite experienced and extremely profitable. However, as the DoJ notes, he had been consistently unprofitable. In January 2018, Spence falsely claimed in an online group that he had generated a return of 148% in the past month. As the DoJ alleges, this was a lie as he had traded in losses for the month.
Spence generated fictitious account balances.
When investors demanded evidence that their money was generating great returns, Spence generated fictitious account balances. He used these to convince existing investors that he was consistently profitable. In addition, he conducted a Ponzi scheme in which he would use the new investment to settle with other investors. “In total, Spence distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors,” the DoJ stated. If convicted, he faces ten years in prison for one count of commodities fraud. He also faces 20 years for one count of wire fraud.