On January 26, 2021, federal prosecutors in New York unsealed a criminal complaint towards 24-year outdated Jeremy Spence (aka “Coin Indicators”). As alleged, Spence took cryptocurrency value over $5 million from greater than 170 particular person buyers after making false representations in reference to these cryptocurrency funds.
The allegations within the grievance allege the next scheme: From November 2017 by way of April 2019, Spence solicited buyers in numerous cryptocurrency funding swimming pools that Spence had created and managed. Spence solicited these investments by way of false representations, together with that Spence’s crypto buying and selling had been extraordinarily worthwhile when, in truth, Spence’s buying and selling had been constantly unprofitable. For instance, on January 28, 2018, Spence posted a message in a web-based chat group falsely claiming that his buying and selling of investor funds over the previous month had generated a return of greater than 148%. On account of this misrepresentation, buyers transferred extra funds to Spence. Actually, over that very same interval of roughly one month, Spence’s buying and selling resulted in internet losses within the accounts through which he traded investor funds. To forestall redemptions by buyers, and to proceed to boost cash from buyers to fund his scheme, Spence generated fictitious account balances, which he made out there to buyers on-line. As a substitute of precisely reporting the buying and selling losses Spence was incurring, the account balances falsely indicated to buyers that they have been earning money by investing with Spence. To cover his buying and selling losses, Spence used new investor funds to pay again different buyers in a Ponzi-like vogue. In complete, Spence distributed cryptocurrency value roughly $2 million to buyers considerably from funds beforehand deposited by different buyers.
Spence is charged with one rely of commodities fraud. Additionally on January 26, the Commodity Futures Buying and selling Fee filed a federal civil enforcement motion Spence arising from the identical details. The CFTC complaint seeks restitution, disgorgement, civil financial penalties, everlasting buying and selling and registration bans, and a everlasting injunction towards additional violations of the Commodity Trade Act and CFTC rules.