The US authorities have opened a criminal case against a cryptocurrency trader who, they say, defrauded investors for more than $ 5 million.
On Tuesday, the Justice Department announced the arrest of Jeremy Spence. Between 2017 and 2019, 24-year-old Spence ran a cryptocurrency investment scheme called Coin Signals, mainly via Twitter and Discord.
The ad quoted FBI Deputy Executive Director William Sweeney:
“It has been argued that Jeremy Spence accidentally replicated the success of his investment platform to get people to send money. Since his trading was less profitable and significantly less successful than it presented to investors, he used the money of new investors to pay off the money of others. He continued to advance the plan – a typical feature of the scheme. Ponzi.
From the criminal case filed along with the announcement, it became clear that Spence was claiming some very lucrative deals through BitMEX, whose management was arrested in October 2020 for facilitating money laundering. The FBI claims that Spence defrauded investors by claiming that he uses BitMEX perpetual contracts to achieve high returns.
In November 2018, although Spence falsified evidence of about 1,000 BTC in his fund, that amount did not exceed 11 BTC, authorities say. Spence was sentenced to 10 years in prison for merchandise fraud and 20 years for cyber fraud.
While these are criminal charges by the Department of Justice, the announcement expresses its gratitude to the CFTC for helping with the investigation. In recent years, the Commodity Futures Trading Commission (CFTC) has worked to expand its ability to identify unregistered or illegal cryptocurrency-based investment schemes. This is largely dependent on new analytic platforms that can investigate parts of the network that traditional CFTC investigators are still trying to identify.