Coin Signals founder to pay $2,847,743 after prison sentence over crypto Ponzi scam

Rick Steves

The U. S. District Court for the Southern District of New York has ordered Jeremy Spence, founder of Coin Signals, to pay $2,847,743 in restitution to victims of a fraudulent virtual currency scheme.

The consent order resolves a CFTC action filed against Jeremy Spence on January 26, 2021 alleging that he operated a virtual currency Ponzi scheme in which he fraudulently solicited individuals to invest in digital assets such as bitcoin and ether.

Jeremy Spence aka Coin Signals was found to obtain more than $5 million of digital assets such as bitcoin and ether from customers in a Ponzi scam that covered his significant trading losses and whose payouts of supposed profits to customers were actually misappropriated funds from other customers.

He was found to misrepresent his trading profitability and the amount of assets he had under management, as he took customer funds and issued false performance statements. Spence eventually admitted to customers that he had engaged in “lies and deceit.”

Jeremy Spence sentenced to 42 months of incarceration

A parallel criminal action had also been filed in New York, charging him with one count of commodities fraud in violation of the CEA and CFTC regulations and one count of wire fraud.

Spence pled guilty to commodities fraud under the CEA and CFTC regulations and was sentenced on May 11, 2022 to 42 months of incarceration and three years of supervised release. He was also ordered to pay restitution of $2,847,743.

CFTC Commissioner Kristin Johnson has publicly come forward to comment on the Coin Signals scam and the need to stop crypto fraud amid liquidity crises and a lack of responsible governance at cryptocurrency exchanges and other prominent crypto-intermediaries that have roiled the digital asset ecosystem.

“I note that today we see an illustration of one more instance of the CFTC’s best efforts to use our existing authority to protect customers. Today, the CFTC announced the entry of a consent order for permanent injunction and other equitable relief against Defendant Jeremy Spence by the Hon. John G. Koeltl of the United States District Court for the Southern District of New York. Specifically, the Consent Order finds that, from approximately December 2017 to April 2019, Spence operated a digital Ponzi scheme under the name “Coin Signals” designed to defraud cryptocurrency investors. Spence’s scheme captured more than $5 million in cryptocurrencies from approximately 175 user accounts.

“Spence enticed customers using various social media platforms and touting an engineered trading record, imagined list of assets under management, and creatively crafted description of highly profitable returns. Through his duplicity, Spence was able to rack up significant trading losses. Consistent with Charles Ponzi’s original, old-school scheme Spence distributed current customer funds to newly solicited investors describing the same as “profits.”

“I want to recognize the hard work of the Division of Enforcement expressly. I also want to commend the Division staff for bringing this action, including Elizabeth Brennan, Brent Tomer, Lenel Hickson, Jr., and the Office of the General Counsel.

“While Spence’s prison term will limit his ability to continue this scheme, other bad actors stand ready, willing, and able to take his place and prey on victims’ hopes and fears. Accordingly, I strongly encourage members of the public to stay informed about the potential scams and abuses in the digital assets markets by visiting our investor advisory page.

Read this next

Institutional FX

FXSpotStream volumes hit 14-month high in November

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for November 2023, which moved higher on a monthly basis.

Digital Assets

Circle denies ties with Palestinian groups, TRON founder

Stablecoin issuer Circle has denied allegations that it facilitates funding for terrorist organizations.

Retail FX

CySEC hits operator of Titanedge, TradeEU with €90,000 fine

The Cyprus Securities and Exchange Commission (CySEC) announced that it has imposed a fine of €90,000 on Titanedge Securities Ltd due to shortcomings in their regulatory obligations.

Institutional FX

Cboe FX volumes retreats slightly in November 2023

Cboe’s institutional spot FX platform today announced its trading volume for the month ending November 2023, which took a step back after a strong rebound in October.

Institutional FX

Alpha Group seals Cobase majority acquisition

Foreign exchange service provider Alpha Group International plc (AIM: ALPH) has finalized its acquisition of Financial Transaction Services, operating as Cobase.

Digital Assets

TMNG Tokens Successfully Listed on MEXC Crypto Exchange

TMN Global proudly announces the successful listing of its native TMNG token on the MEXC crypto exchange, effective December 1st, 2023. This strategic partnership marks a significant milestone for TMN Global in the crypto space.

Institutional FX

Marex completes acquisition of TD Cowen’s PB business

London-headquartered commodities broker Marex has completed the acquisition of TD Cowen’s prime brokerage and outsourced trading business, which will be integrated into Marex’s capital market division. This division was established following the acquisition of ED&F Man Capital Markets in 2022.

Digital Assets

Talos introduces decentralized liquidity and onchain settlement with Uniswap and Fireblocks

“At the cornerstone of the DeFi ecosystem, Uniswap has the breadth of assets and depth of liquidity that institutional traders need. And to have this partnership powered by Fireblocks, a digital assets infrastructure provider trusted by some of the most renowned institutions, is very fitting.”

Digital Assets

FINMA-regulated crypto bank SEBA Bank rebrands to AMINA

“As we look forward to 2024, our ambition is to accelerate the growth of our strategic hubs in Switzerland, Hong Kong, and Abu Dhabi, and to continue our global expansion, building on all the successes we have laid down over the past years.”