The Coin Signals trader will spend the next 3.5 years in prison for running a fraudulent crypto scheme that solicited more than $5 million from investors.
The United States Department of Justice (DOJ) has sentenced a 25-year-old Rhode Island cryptocurrency trader, popularly known as Coin Signals, to 42 months in prison for defrauding over 170 people of more than $5 million.
According to an official press release, the convict, Jeremy Spence, had solicited funds from investors via several crypto investment pools, which he ran from November 2017 to April 2019.
He created and managed several crypto funds, including the three biggest ones – the Coin Signals Bitmex Fund, the Coin Signals Alternative Fund, and the Coin Signals Long Term Fund. Spence claimed that his trades were doing well and generated enormous profits, prompting investors to send him cryptocurrencies like BTC and ETH to operate on their behalf.
At one point, he even posted a message in an online chat group falsely claiming that his trading of investor funds over the past month had generated a return of more than 148%. As a result, some investors sent him additional funds.
The Justice Department, however, pointed out that Spence’s claims were far from the truth.
“SPENCE solicited more than $5 million through false representations, including that SPENCE’s crypto trading had been extremely profitable when, in fact, SPENCE’s trading had been consistently unprofitable…
In fact, over that same period of approximately one month, SPENCE’s trading resulted in net losses in the accounts in which he traded investor funds,” the DOJ noted.
To cover up for the net losses he incurred while trading with investors’ funds, Spence created false account balances to keep raising money and started operating a Ponzi scheme.
He used funds from new investors to pay old ones and kept the ruse going for as long as possible. He was able to distribute over $2 million worth of crypto assets to investors through the scheme.
“Instead of accurately reporting the trading losses SPENCE was incurring, the account balances falsely indicated to investors that they were making money by investing with SPENCE,” the DOJ added.
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 jail term, Spence will have three years of supervised release and pay restitution of over $2 million after his release.
Mandy Williams is a full-time reporter at CryptoPotato. She joined the cryptocurrency space in early 2017 during her search for financial freedom and has remained devoted to the industry.
Contact Mandy: Twitter

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