25-year-old cryptocurrency trader from Rhode Island, Jeremy Spence, also known as “Coin Signals” on social media, was sentenced to 42 months of prison. He was accused of defrauding 170 people for over 5, 37 million dollars. Fake investment funds The Department of Justice (DoJ) issued a press release claiming that Spence had managed several investment funds in cryptocurrencies between November 2017 and April 2019. These include Coin Signals Bitmex Fund, Coin Signals Alternative Fund and Coin Signals Alternative and Coin Signals Long Term Fund. Investors interested in the fund would have transferred cryptocurrencies such as Bitcoin and Ethereum to Spence which in turn did false promises of high returns. Judge Lewis Kaplan of the United States District Court for the Southern District of New York said: “Spence solicited more than $ 5 million through misrepresentation , including the fact that Spence’s cryptocurrency trading had been extremely profitable when, in fact, his trading was consistently unprofitable. ” Requests refund of 148% per month The 28 January 2018, Spence posted in an online chat group stating that his trading skills have generated returns of over 148% in just one month. This encouraged investors to entrust him with additional funds. The DoJ went on to say: Indeed, Spence’s trading resulted in net losses on the accounts where he traded funds over the same period of about a month. Spence used new funds to cover losses and make payments to old investors. This allowed him to continue to cheat and raise more money. The DoJ added: “To hide his commercial losses, Spence has used new investor funds to pay off other investors in a Ponzi model. ” A 2 return invoice. 847. 743 $ Spence used the cryptocurrency of new investors worth about 2 millions of dollars as a deposit to be distributed to old investors. Judge Kaplan told the defendant: “What struck me was the stupidity of the people you convinced to invest with you. There are real implications for these scams and they are serious. ” Spence, who pleaded guilty last November, will be released under supervision for three years and will have to pay a refund of 2. 847. 743 $ to those who defrauded.