CFTC says “Coin Signals” operator must pay $44M in penalties
In line with earlier FX News Group reports, the United States Commodity Futures Trading Commission (CFTC) is pushing for a default judgment against the operator of “Coin Signals” Jeremy Spence.
Today, the regulator filed a proposed default judgment with the New York Southern District Court. The document explains that the defendant was properly served with process on January 28, 2021. However, he failed to answer the Complaint within the time permitted by Fed. R. Civ. P. 12(a)(1) or otherwise defend.
Now, the Commission has applied to the Court for grant of final judgment by default against Jeremy Spence, an order of permanent injunctive relief, and imposition of a restitution obligation and civil monetary penalty.
According to the order, 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.
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.”
Let’s note that there are criminal proceedings against Spence. In January 2021, the United States Attorney for the Southern District of New York announced the unsealing of a Complaint in Manhattan federal court charging Spence with commodities fraud and wire fraud offences.