CFTC, operator of “Coin Signals” agree on proposed settlement
The Commodity Futures Trading Commission (CFTC) and Jeremy Spence, the operator of “Coin Signals”, have agreed in principle to a proposed consent order. This becomes clear from a status update provided to the New York Southern District Court on September 15, 2022.
The CFTC and Spence have been engaged in settlement discussions through Mr. Spence’s criminal counsel, Neil Kelly, Esq. The Division of Enforcement and Mr. Spence have agreed in principle to a proposed Consent Order, which must be submitted for consideration and approval by the Commodity Futures Trading Commission prior to its submission to the Court for approval.
The parties are set to provide a further status update to the Court by November 1, 2022.
Earlier this year, the CFTC sought the entry of a default judgment against Spence. Under the proposed judgment, Jeremy Spence has to pay a civil monetary penalty in the amount of $33,000,000. He will also have to pay restitution in the amount of $11,036,046.27 to the Coin Signals customers.
Whether the terms of the settlement are the same as those envisaged by the proposed default judgment is not clear at this point.
Let’s recall that the CFTC filed its complaint against Spence in January 2021. Spence was charged with fraud for operating a Ponzi scheme involving digital assets such as bitcoin and ether in which he fraudulently solicited more than $5 million of investments from individuals.
The complaint alleges that Spence, at times operating as “Coin Signals,” ran a Ponzi scheme in which he fraudulently solicited and obtained digital assets such as bitcoin and ether worth more than $5 million from customers. According to the complaint, Spence’s trading resulted in significant trading losses and, as in all Ponzi schemes, his payouts of supposed profits to customers in actuality consisted of other customers’ misappropriated funds.
Spence allegedly engaged in numerous efforts to conceal his misconduct, including misrepresenting his trading profitability and the amount of assets he had under management, misappropriating customer funds, and issuing false performance statements. As stated in the complaint, Spence eventually admitted to his customers that he had engaged in “lies and deceit.”