- Federal prosecutors accused a well-known cryptocurrency trader living in Rhode Island of defrauding $ 5 million by involving investors in a Ponzi-like scheme.
Federal prosecutors accused a well-known cryptocurrency trader living in Rhode Island of defrauding $ 5 million by involving investors in a Ponzi-like scheme.
Jeremy Spence accused of creating the Ponzi scheme
According to the statement made by the US Department of Justice today, it is stated that Jeremy Spence, known as “Coin Signals” between November 2017 and April 2019, defrauded investors. Spence is particularly accused of commodity fraud.
The DOJ said:
SPENCE has allegedly received over $ 5 million of cryptocurrencies from more than 170 individual investors after misrepresenting in connection with these cryptocurrency funds.
How did the trader manage the process?
The DOJ statement contained the following statements:
From November 2017 to April 2019, SPENCE invited investors to various cryptocurrency investment pools (“Funds”) created and managed by SPENCE. SPENCE has requested investments for various Funds, the largest and most active being the Coin Signals Bitmex Fund. Investors who want to join a Fund have transferred cryptocurrency (such as Bitcoin and Ethereum).
FBI Deputy Managing Director William Sweeney said in a statement:
As alleged, Jeremy Spence misrepresented the success of the investment platform to persuade people to send money their way. Because his trading was less than profitable and far less successful than it represented to investors, he used the money from new investors to pay others to continue his plan. A typical Ponzi scheme sign.
Convicted of all charges, Spence faces up to 30 years in prison.