The young CEO of Coin Signals, Jeremy Spence, faces up to 10 years in prison for fraud.
Young and ambitious trader, Jeremy Spence, promised his investors that he would multiply their money with a few months of trading cryptocurrencies. Numerous investors believed him and sent him thousands of dollars in cryptocurrencies. Unfortunately, the only thing Spence’s activities have brought is a fraud case.
Spence, who operates several cryptocurrency funds under the name, Coin Signals, has just pleaded guilty to commodities fraud for scamming crypto investors of their hard-earned money.
The 25-year-old from Bristol, Rhode Island, was initially charged in January 2021 by prosecutors with a maximum sentence of 30 years. However, his recent guilty plea might have beaten it down to a maximum of 10 years.
According to the Justice Department, he consistently lured investors into different cryptocurrency scams with promises of interest rates as high as 148%.
Spence “solicited over $5 million from more than 170 individual investors for various cryptocurrency funds that he operated, after making false representations in connection with these funds,” the DOJ explained.
His scams were carried out between November 2017 and April 2019. His most popular funds were Coin Signals Bitmex Fund (CS Mex Fund), Coin Signals Alternative Fund (CS Alt Fund), and Coin Signals Long Term Fund.
Spence convinced prospective investors that he was a seasoned trader and anyone who wanted to be part of the fund would transfer their Bitcoin or Ether to him.
He made a series of bad trades which led to the loss of his investors’ money. To keep up appearances, he falsified their account balances and regularly used the money from new investors to pay as proceeds to old investors. This cycle kept luring more and more people into the fraudulent scheme.
“To hide his trading losses, Spence used new investor funds to pay back other investors in a Ponzi-like fashion,” the DOJ described, adding that he “distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors.”
Spence’s sentence date is yet to be disclosed.
Unfortunately, as crypto increases in popularity, the number of Spences — mediocre traders looking to swindle innocent people of their money — out there also increases.
Just like with traditional finance options like forex and equities, trading cryptocurrencies successfully is only possible with a lot of experience and an ample amount of luck. Investors eager to invest in crypto are better off with registered and regulated companies and not individual traders.