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“Coin Signals” trader arrested in $5 million fraud case

Jeremy Spence was charged with commodities fraud and wire fraud offences for soliciting investments from over 170 people based on false representations

Jeremy Spence, aka “Coin Signals”, was arrested yesterday in Rhode Island according to a press release from the US Department of Justice. Spence, 24, is a cryptocurrency trader who allegedly solicited more than $5 million from over 170 investors for various cryptocurrency funds based on false representations of their successes.

The complaint, unsealed in Manhattan federal court yesterday, alleges that Spence created and managed various investment pools between November 2017 and April 2019 which he convinced investors to transfer cryptocurrencies such as Bitcoin and Ethereum into. He persuaded them by claiming that his crypto trading had been extremely profitable, generating returns of up to 148%, when in fact he had been consistently trading at a loss.

Spence created fake account balances, which he made available to investors online, showing that they were making profits on their investments when Spence was actually losing money. This allowed him to continue to raise money from new investors and use some of their funds to pay back previous investors and hide losses in a Ponzi-like fashion. Around $2 million in total, largely from funds deposited by investors, were distributed to other investors.

Manhattan US Attorney, Audrey Strauss, commented, “Jeremy Spence, a/k/a, ‘Coin Signals,’ allegedly lured investors to his cryptocurrency investment scam by touting returns of up to 148%. Spence’s investments not only failed to reach his audacious claims, they consistently lost money, leaving a $5 million void in his clients’ crypto accounts. Spence’s alleged conduct should strongly signal would-be investors to thoroughly educate themselves in the cryptocurrency ecosystem before falling prey to investment scams promising huge returns for small investments that are indeed too good to be true.”

Spence is charged with one count of wire fraud and one count of commodities fraud which carry maximum sentences of 20 years in prison and 10 years in prison respectively. The case is being handled by the Office’s Securities and Commodities Fraud Task Force and Spence was due to be presented before Magistrate Judge Patricia A. Sullivan yesterday in the US District Court for the District of Rhode Island.

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