The US Department of Justice (DOJ) has sentenced a 25-year-old cryptocurrency trader from Rhode Island, known as “Coin Signals,” to 42 months in prison for defrauding more than 170 people with more than $5 million.

Cryptocurrency fraud:

According For an official press releaseConvict Jeremy Spence had solicited money from investors via several crypto investment pools, which he ran from November 2017 to April 2019.

He has created and managed several crypto funds, including the three largest:

Bitmex Coin Signals Fund, Coin Signals Alternative Fund, and Coin Signals Long Term Fund.

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Jeremy Spence claimed his trades were doing well and generated huge profits, which prompted investors to send their cryptocurrencies like Bitcoin and Ethereum to trade on their behalf.

Using False Claims to Attract Investors:

At one point, Jeremy Spence posted a message in an online chat group falsely claiming that his trading of investor money over the past month had generated a return of over 148%.

As a result, some investors sent him extra money.

But the Justice Department has indicated that Jeremy Spence’s allegations are far from the truth.

In fact, during the same period of about one month, Jeremy Spence’s trading resulted in net losses in the accounts in which the investors’ money was traded.

To cover up the net losses he incurred while trading investors’ money, Jeremy Spence created fake account balances to continue raising money and started a Ponzi scheme.

He used money from new investors to pay off old investors and kept the scam going for as long as possible.

He was able to distribute more than $2 million in cryptocurrency to investors through the scheme.

The Ministry of Justice added:

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Instead of accurately reporting Jeremy Spence’s trading losses, account balances falsely indicated that they were making money.

Finally, Jeremy Spence was arrested in January 2021 by the Federal Bureau of Investigation (FBI), and separate civil charges were brought against him by the Commodity Futures Trading Commission (CFTC).

He pleaded guilty to the charges in November 2021.

In addition to his 42-month prison term, Jeremy Spence will receive three years of supervised release and more than $2 million in restitution after his release.

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