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A crypto trader who referred to himself as 'Coin Signals' was slapped with a 42 month prison sentence for defrauding 170 people

Added 05-12-22 04:14:02am EST - “Jeremy Spence was convicted of soliciting $5 million by pretending his crypto trades were far more profitable than they actually were.” - Businessinsider.com

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Posted By TheNewsCommenter: From Businessinsider.com: “A crypto trader who referred to himself as 'Coin Signals' was slapped with a 42 month prison sentence for defrauding 170 people”. Below is an excerpt from the article.

A 25-year-old Rhode Island cryptocurrency trader known by the nickname "Coin Signals" has been sentenced to 42 months in prison for defrauding 170 people of more than $5 million. 

Jeremy Spence was hit with the prison term this week for a crypto scam that he ran from November 2017 to April 2019. According to a Justice Department press release, Spence managed various crypto investment pools, then solicited money from eager investors, claiming that his trades were far more profitable than they were. 

The three funds — the Coin Signals Bitmex Fund, the Coin Signals Alternative Fund, and the Coin Signals Long Term Fund, were all created and operated by Spence. Investors would then transfer crypto coins like bitcoin and ethereum to Spence to make investments. 

The catch, however, was that Spence falsely claimed that the trades were generating high returns, leading interested investors to transfer additional funds, per a court filing. The filing accused Spence of soliciting cryptocurrency worth more than $5.37 million at the time from more than 170 individual investors.

To cover up net losses from these investors, Spence tried to deceive them with fictitious account balances to keep raising money. Spence also used the new funds obtained from fresh crops of investors to cover up losses and pay out cash to old investors to keep the ruse going. 

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