Jeremy Spence of Bristol, Rhode Island, has been permanently barred from trading and soliciting investments after admitting to operating a multi-million dollar cryptocurrency Ponzi scheme, the Commodity Futures Trading Commission (CFTC) announced Wednesday.
The U.S. District Court for the Southern District of New York entered a consent order on November 29, imposing a permanent injunction, restitution, and other equitable relief against Spence, who also operated under the name Coin Signals. The CFTC initially filed a complaint against Spence on January 26, 2021, alleging the fraudulent scheme.
Between December 2017 and April 2019, Spence fraudulently solicited over $5 million in digital assets, including Bitcoin and Ether, from investors. The scheme relied on attracting new investors to pay profits to earlier investors, a hallmark of Ponzi schemes. Spence’s trading activities consistently resulted in losses, and customer payouts were funded by subsequent investments, rather than legitimate profits.
The court order requires Spence to pay $2,847,743 in restitution to victims. He is also permanently prohibited from violating the Commodity Exchange Act (CEA) and CFTC regulations, and is banned from future registration and trading activities.
This enforcement action runs parallel to a criminal case brought by the U.S. Attorney’s Office for the Southern District of New York. Spence pled guilty to commodities fraud and wire fraud, and on May 11, 2022, was sentenced to 42 months of incarceration followed by three years of supervised release. The criminal court also ordered him to pay $2,847,743 in restitution.
The CFTC cautions that restitution orders do not guarantee full recovery of losses, as wrongdoers may lack sufficient assets. The agency vows to continue its efforts to protect customers and hold fraudulent actors accountable. The investigation received cooperation from the Federal Bureau of Investigation.
Elizabeth C. Brennan, Christopher Giglio, K. Brent Tomer, Lenel Hickson, Jr., Manal M. Sultan, and former staff member Gates Hurand of the CFTC’s Division of Enforcement led the case, with assistance from the Digital Assets Task Force.
Source: CFTC.gov
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