TL; DR Breakdown
- Coin Signals boss pleads guilty to crypto scam charge
- Investors of the scam lost $5 million
- Spence will spend ten years in jail
In the last few months, there have been many crypto scams and hacks in the entire market. This makes every market participant worry that people still decide to take the illicit route despite the market providing earning opportunities. In another win for regulators against perpetrators of scams and hacks, the founder of platform Coin Signals has pleaded guilty at a court hearing.
Investors of the crypto scam lost $5 million
According to files obtained by the media, the platform CEO said that he lured investors to the crypto scam under the promise of making profits. A statement by the Justice Department said the criminal in question, Jeremy Spence, scammed users of the platform of nothing less than $5 million. In the document by the Justice department, Spence, who also goes by Coin Signals, lost funds amounting to about $5 million from 170 investors on his platform.
His modus operandi was to convince the investors that he had an affiliation with some top companies around the globe, leaving the investors relaxed to carry out business on the platform. According to the attorney representing the United States, Damian Williams, the CEO pleaded guilty to baiting investors to his website by offering them a return of about 148% on their investments over a while.
Spence to spend 10 years in jail
The DOJ claimed that the platform ran into a loss in the real sense of things, which saw $5 million, that belong to investors disappear in the process. Spence acted alone, bringing investors into his self-created funds, which deals in digital assets. In the statement by the regulator, the crypto scam ran from November 2017 to April 2019. His investment funds included Bitmex Fund, Long Term Fund, and Alternative Fund, which were all under the Coin Signals umbrella. Spence noted that investors can earn returns by sending the amount they wanted to invest into Spence.
After collecting it in crypto, Spence would then allegedly invest them into his investment fund. In a bid to hide the losses on the platform, Spence continued to use a Ponzi-like method to pay his investors. In this case, the Coin Signals CEO would pay old investors who are due for payment with funds gotten from newer platform members. The Justice Department said he could offset debts of about $2 million using the same method mentioned above. With Spence pleading guilty to the crypto crime, he will spend about ten years in jail.
