A cryptocurrency dealer accused of creating false representations in reference to funds he operated has been charged with commodities fraud and wire fraud offenses. Jeremy Spence, 24, who additionally goes by the sobriquet “Coin Indicators,” allegedly took cryptocurrency value over $5 million from greater than 170 buyers.
The US Lawyer’s Workplace for the Southern District of New York stated Spence lured buyers to his alleged cryptocurrency funding rip-off by claiming that his buying and selling of investor funds had generated a return of greater than 148% in only one month. However in line with the grievance in opposition to him that was unsealed in Manhattan federal courtroom, Spence’s buying and selling had been “persistently unprofitable” and used new investor funds to pay again different buyers—the hallmark of a Ponzi scheme. The grievance alleges Spence distributed cryptocurrency value not less than $2 million to buyers from funds beforehand deposited by different buyers.
“Spence’s investments not solely failed to achieve his audacious claims, they persistently misplaced cash, leaving a $5 million void in his purchasers’ crypto accounts,” Manhattan US Lawyer Audrey Strauss stated in an announcement. “Spence’s alleged conduct ought to strongly sign would-be buyers to totally educate themselves within the cryptocurrency ecosystem earlier than falling prey to funding scams promising large returns for small investments which might be certainly too good to be true.”
Spence solicited investments for a number of funds, the biggest and most energetic of which have been the Coin Indicators Bitmex Fund, the Coin Indicators Various Fund, and the Coin Indicators Lengthy Time period Fund. Buyers seeking to put money into a fund would switch cryptocurrencies corresponding to Bitcoin and Ethereum to Spence to make the funding.
To forestall buyers from making redemptions, and to proceed to lift cash from them, Spence allegedly created faux account balances that he made obtainable to buyers on-line that falsely confirmed they have been earning money as a substitute of precisely reporting the buying and selling losses Spence was racking up.
Spence is charged with one rely of wire fraud, which carries a most sentence of 20 years in jail, and one rely of commodities fraud, which carries a most sentence of 10 years in jail.