A cryptocurrency fund manager has been charged in a US federal court. He is said to have taken over $ 5 million from investors looking to invest in his crypto funds, promising them high returns. In reality, he had a Ponzi scheme and is now facing up to 30 years in prison.
Crypto Fund Manager Arrested For Running Ponzi Scheme
The United States Department of Justice (DOJ) announced on Tuesday that Jeremy Spence has been arrested and charged with a fraudulent cryptocurrency scheme. The 24-year-old from Bristol, Rhode Island, is also known as ‘Coin Signals’.
Spence is “a cryptocurrency trader who has solicited money for various cryptocurrency funds he operated, with commodity fraud and wire fraud offenses,” described the DOJ, adding:
Spence took on cryptocurrency worth over $ 5 million from more than 170 individual investors after making false statements in connection with these cryptocurrency funds.
US attorney Audrey Strauss explained that the defendant “allegedly lured investors into his cryptocurrency investment scam by promoting returns of up to 148%.” However, his investment pools consistently lost money.
Sweeney, deputy director of the FBI, went on to explain that Spence reportedly “used money from new investors to pay off others to keep his plan going – a hallmark of a Ponzi scheme.”
According to the Justice Department, Spence solicited investors from November 2017 to April 2019 for various cryptocurrency investment funds that he created and managed. Investors “would transfer cryptocurrency, such as bitcoin and ethereum, to him” to invest in the funds for them. The DOJ elaborated:
The largest and most active of these were the Coin Signals Bitmex Fund, a / k / a the ‘CS Mex Fund’, the Coin Signals Alternative Fund, a / k / a the ‘CS Alt Fund’ and the Coin Signals Long Term Fund.
Spence is charged with one commodity fraud, which carries a maximum sentence of 10 years in prison, and once of wire fraud, which carries a maximum sentence of 20 years in prison.
The Commodity Futures Trading Commission (CFTC) has also filed federal civil enforcement action against Spence, accusing him of fraud in carrying out the Ponzi scheme.
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