Jeremy Spence, aka Coin Signals, has received a judgment of 42 months in prison for defrauding over 170 investors.
According to the US Department of Justice, Spence pled guilty with the sentence being handed down this past week. Charges were originally filed in early 2021 including an enforcement action by the CFTC.
In addition to the prison term, Spence, of Bristol, Rhode Island, was sentenced to three years of supervised released and restitution in the amount of $2,847,743.00.
The DOJ shares that from November 2017 through April 2019, Spence solicited investors in various cryptocurrency investment pools that he had created and managed. The largest and most active of which were the Coin Signals Bitmex Fund, or the “CS Mex Fund,” the Coin Signals Alternative Fund, 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, for Spence to invest the funds.
He is said to have solicited over $5 million by claiming his trading was very profitable when the opposite was true. The DOJ points to an example of January 28, 2018, where he posted a message in an online chat group falsely claiming that his trading of investor funds over the past month had generated a return of more than 148%. These claims encouraged investors to let him trade their funds but in reality during that period he had experienced net losses.
In a Ponzi-like move, Spence would raise new funds from investors to pay redemptions while generating bogus account balances that claimed a positive return.
In total, Spence is said to have distributed crypto worth approximately $2 million to investors substantially from funds previously deposited by other investors.
