A cryptocurrency fund manager has been charged in a US federal court. He has reportedly raised over $ 5 million from investors interested in investing in his crypto funds and promised them high returns. In reality, he ran a Ponzi program and now faces up to 30 years in prison.
Crypto Fund Manager Arrested for Running a Ponzi Program
The U.S. Department of Justice (DOJ) announced Tuesday that Jeremy Spence had been arrested and charged with a fraudulent cryptocurrency scheme in federal court in Manhattan. The 24-year-old from Bristol, Rhode Island, is also known as the “coin signals”.
Spence is “a cryptocurrency trader who has solicited funds for various cryptocurrency funds that it has operated in commodity fraud and wire fraud,” described the DOJ, adding:
Spence has stolen over $ 5 million worth of cryptocurrency from more than 170 individual investors after misrepresenting claims related to these cryptocurrency funds.
US attorney Audrey Strauss stated that the defendant “allegedly lured investors into his cryptocurrency investment fraud by touting returns of up to 148%”. However, its investment pools consistently lost money.
Sweeney, FBI deputy director, said Spence allegedly “used money from new investors to pay off others to keep his plan moving – a typical marker of a Ponzi program.”
From November 2017 through April 2019, Spence solicited investors for several cryptocurrency mutual funds he created and managed, according to the Justice Department. Investors “would transfer cryptocurrencies like Bitcoin and Ethereum” to invest in the funds for them. The DOJ stated:
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 a number of commodity frauds with a maximum sentence of 10 years in prison and a number of wire fraud with a maximum sentence of 20 years in prison.
The Commodity Futures Trading Commission (CFTC) has also filed a criminal prosecution lawsuit against Spence, accusing him of fraud for operating the Ponzi scheme.
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