Coin Signals’ Jeremy Spence to pay $44m penalties at CFTC request

The Commodity Futures Trading Commission (CFTC) has stated that “Coin Signals” operator, Jeremy Spence, must pay $44 million in penalties after failing to answer a previous Complaint within the permitted time. The CFTC has now filed for a default judgement against the former operator in conjunction with the New York Southern District Court, consisting of a restitution obligation, civil monetary fine and indefinite injunctive relief.

Spence was initially charged with fraud in January 2021, having been found to be operating an illegal Ponzi scheme where he solicited over $5 million from over 170  investors. The Ponzi scheme involved digital assets, including bitcoin and ether, to entice customer trust with the promise of profits in return for investment.

The initial complaint filed at the start of the year alleged that Spence’s Ponzi scheme resulted in extreme losses for customers and that his payouts from alleged ‘profits’ were in fact the misappropriated funds of other victims of the scheme. Spence had attempted to hide his illegal activities by falsifying the number of assets he possessed under management, as well as his trading profitability. He also misappropriated customer funds and issued false performance statements to conceal his fraud.

CFTC penalty

The civil monetary fine that Spence will have to pay amounts to $33 million according to the latest CFTC order, with restitution penalties totalling just over $11 million to be paid to Coin Signal customers who fell victim to the fraudulent scheme. The initial complaint stated that Spence eventually conceded to Ponzi victims that he had used ‘lies and deceit’ during his time as the operator of Coin Signals.

Criminal proceedings were also filed against Jeremy Spence at the start of the year, after he was arrested in Rhode Island. Here, the US Attorney for the Southern District of New York charged Spence with wire fraud offences and commodities fraud after unsealing the complaint at the Manhattan federal court. These charges placed against 24 year old Spence could carry sentences of 10 and 20 years respectively.

When the CFTC initially revealed the complaint,  Acting Director of Enforcement Vincent McGonagle stated:

Fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital asset markets and cheat customers out of their hard-earned money.

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