Law enforcement apprehended the operator of Coin Signals and sentenced him to 42 months in prison. The operator scammed over 170 people using a Ponzi scheme. Defendant Jeremy Spence ran a series of cryptocurrency funds that claimed to offer huge profits but operated as a scam.
The U.S. Department of Justice stated that Spence, 25, solicited millions of dollars through false statements, “including that Spence’s crypto trading had been extremely profitable when, in fact, Spence’s trading had been consistently unprofitable.”
Coin Signals unmasked as fraud
District Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York handed down the decision to Spence. He ran the social media platforms for a crypto investment scheme. They also gave Spence a three-year supervised release sentence, and he must repay his victims $2.8 million.
The Federal Bureau of Investigation (FBI) arrested Spence in January 2021. In addition, the Commodity Futures Trading Commission has filed separate civil charges (CFTC).
‘Mortified’ Spence pleads guilty
The Coin Signals operator pleaded guilty to commodities fraud in November 2021 for scamming over $5 million from unknowing crypto investors. He fraudulently claimed that several cryptocurrency funds he created between November 2017 and April 2019 saw profits. In reality, the investors start losing money slowly.
“The thing I was struck by was the stupidity of the people you gulled into investing with you, there are real-life consequences to these shenanigans and they are serious,” Judge Kaplan, who presided over the case, said (per Law360).
Unknowingly, investors would send crypto to Spence to invest in the hopes of making a profit. Still, because his trades were losing money, he generated phony account balances to disguise the losses.
During the trial, Spence told Judge Kaplan in a statement that his behavior “mortified” himself. He apologized to his investors. He claimed he was unqualified to trade the amount he was paid, adding that he “entered a world that [he] was completely unprepared for.”