The Commodity Futures Trading Commission (CFTC) has filed a federal civil enforcement action in the U.S. District Court for the Southern District of New York charging Jeremy Spence of New York, alleging fraud for operating a Ponzi scheme involving digital assets such as Bitcoin and Ether. According to the CFTC, Spence fraudulently solicited more than $5 million of investments from individuals.
Simultaneously, Spence was charged by federal criminal complaint in the U.S. District Court for the Southern District of New York. The Federal Bureau of Investigation (FBI) arrested Spence on Tuesday.
The complaint alleges that Spence, at times operating as “Coin Signals,” ran a Ponzi scheme in which he solicited and obtained digital assets from approximately 175 users involving misrepresentations of his trading record, assets under management, and highly profitable returns.
According to the complaint, Spence’s trading resulted in significant trading losses and his payouts of supposed profits to customers in actuality consisted of other customers’ misappropriated funds.
The CFTC complains states that Spence eventually admitted to his customers that he had engaged in “lies and deceit.”
“Fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital asset markets and cheat customers out of their hard-earned money,” said Acting Director of Enforcement Vincent McGonagle. “We will continue to work to protect participants in our markets from fraudulent practices and hold fraudsters accountable.”
In its continuing litigation, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.
In 2018, Florida law firm Silver Miller filed a class action lawsuit against “Coin Signals”.