Damian Williams, the United State Legal professional for the Southern District of New York, introduced in the present day the responsible plea of JEREMY SPENCE, a/okay/a “Coin Indicators,” a cryptocurrency dealer who solicited over $5 million from greater than 170 particular person buyers for numerous cryptocurrency funds that he operated, after making false representations in reference to these funds. SPENCE pled responsible in the present day earlier than U.S. Justice of the Peace Decide Debra Freeman. The case is assigned to U.S. District Decide Lewis A. Kaplan.
U.S. Legal professional Damian Williams stated: “Jeremy Spence, a/okay/a, ‘Coin Indicators,’ admitted in the present day to luring buyers to his cryptocurrency funding rip-off by touting fictitious historic returns of as much as 148%. In actuality, Spence’s investments constantly misplaced cash, and his rip-off left buyers with a $5 million loss. The bourgeoning cryptocurrency market could be engaging to buyers; nevertheless, buyers ought to pay attention to the inherent dangers, together with the danger of fraud.”
Based on the Indictment and the Criticism filed on this case, and statements made in open courtroom:
From November 2017 via April 2019, SPENCE solicited buyers in numerous cryptocurrency funding swimming pools that SPENCE had created and managed (the “Funds”). SPENCE solicited investments for a number of Funds, the most important and most lively of which have been the Coin Indicators Bitmex Fund, a/okay/a the “CS Mex Fund,” the Coin Indicators Different Fund, a/okay/a the “CS Alt Fund,” and the Coin Indicators Lengthy Time period Fund. Traders who wished to take part in a Fund would switch cryptocurrency, resembling Bitcoin and Ethereum, to SPENCE to ensure that SPENCE to take a position it.
SPENCE solicited these investments via 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 web 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 profits 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 style. In whole, SPENCE distributed cryptocurrency value roughly $2 million to buyers considerably from funds beforehand deposited by different buyers.
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SPENCE, 25, pled responsible to commodities fraud, which carries a most sentence of ten years in jail. The utmost potential sentence is prescribed by Congress and offered right here for informational functions solely, as any sentencing of the defendants might be decided by the choose.
SPENCE is scheduled to be sentenced at a later date by Decide Kaplan.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation and thanked the Commodity Futures Buying and selling Fee, which introduced a separate civil motion.
The case is being dealt with by the Workplace’s Securities and Commodities Fraud Unit. Assistant U.S. Legal professional Christine I. Magdo is in command of the prosecution.