Coin Signals ordered to pay $2.8 million in CFTC crypto fraud suit

According to a public statement by the CFTC on Thursday, Jeremy Spenz, founder of Coin Signals pled guilty to running a ponzi scheme. Jeremy Spence is ordered to repay the amount that he allegedly gained by soliciting individuals to invest in digital assets, including bitcoin and ethereum from Dec. 2017 through Apr. 2019.

Coin Signals ordered to repay its victims

The U.S. District Court for the Southern District of New York has ordered Coin Signals to pay $2.8 million in restitution to victims of its crypto scam. Announcing the closure of its case against Coin Signals on Thursday, CFTC wrote;

“Today, the CFTC announced the entry of a consent order for permanent injunction and other equitable relief against Defendant Jeremy Spence (“Consent Order”) by the Hon. John G. Koeltl of the United States District Court for the Southern District of New York.”

Coin Signals fraud

Jeremy Spence, CEO of Coin Signals, faced allegations by a CFTC action filed on Jan. 26, 2021. At the same time, a criminal action was also 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.

As reported by the CFTC, “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”. 

On May 11 2022, Spence pled guilty to commodities fraud under the CEA and CFTC regulations and was sentenced to 42 months of incarceration and three years of supervised release. According to the CFTC, Spence’s “Coin Signals” scheme earned more than $5 million in cryptocurrencies from approximately 175 victims.

CFTC exec calls for vigilance

In his statement, Commissioner Kristin N. Johnson of the CFTC, has commended the commission’s effort at curbing cyber fraud, stating the need for more of such in the crypto scene. In his exact words, “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.”

He added: “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.