CoinSignals Operator Jeremy Spence Arrested by FBI

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  • Bitcoin fund manager Jeremy Spence has been arrested after an FBI investigation into his CoinSignals trading operation
  • Spence lost some $5 million in user funds between November 2017 and November 2018
  • A class action lawsuit prompted the investigation after 174 victims were identified

A Bitcoin fund manager who operated a Ponzi scheme and lost $5 million of his clients’ money has been arrested by the FBI more than two years after victims pressed charges. Jeremy Spence, who went by the name CoinSignals, convinced 174 individuals to hand over the contributions, saying he could return three figure profits when in fact he was using new money to pay back older investors. It is suspected that Spence lost a huge chunk of the money when Bitcoin crashed from $6,480 to $3,660 in November 2018.

CoinSignals Suffered Crippling Drawdown

Spence started his various CoinSignals funds in November 2017 at the height of the crypto bull run and was initially successful, becoming a high-profile account on Twitter. However, as the market turned progressively worse in 2018 he began losing money, requiring new funds to pay out old investors. It is believed that the CoinSignals accounts experienced a crippling drawdown when Bitcoin crashed 50% in November 2018, which is when the last posts on his Twitter account was made.

Spence was also able to get into some sought after ICOs in 2017 and 2018, but these too turned sour – in one case he sold the tokens on exchange before hoping to buy back lower and hand out to buyers, and in another case he received a 100% refund but kept all the tokens to himself.

Class Action Lawsuit Leads to FBI Investigation

Following this suspected loss of funds, Spence was the target of a class action lawsuit, which culminated yesterday in a judge issuing a warrant for his arrest. Reflecting the seriousness of the crime, the FBI was put onto the case and Spence was arrested in his Rhode Island home yesterday. His CoinSignals scam leaves him facing one count of commodities fraud and one count of wire fraud, which carries a maximum sentence of 30 years in prison.

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