Commodity Futures Trading Commission v. Jeremy Spence was filed in the Southern District of New York on January 26, 2021 by the CFTC, alleging violations of the Commodity Exchange Act and corresponding commission regulations. Specifically, the complaint alleges fraud by deceptive device or contrivance for acts perpetrated by the unregistered defendant.
The defendant is an individual doing business under the name “Coin Signals” who allegedly solicited approximately $5 million from online users for the purpose of investing in electronic currency, namely Bitcoin.
The defendant purported to trade e-currency successfully using a conservative trading model, which touted a 2,000% return for investors by year end and made allegedly false assertions of gains and assets in control of Coin Signals. In soliciting investments, Coin Signals purported to take a 15% fee from investor profits, though these funds were allegedly taken directly from investment funds rather than gains. The solicitations apparently occurred in “rounds,” and the funds generated from a round allegedly would pay for returns promised to other investors in a previous round. According to the CFTC’s complaint, the scheme seemed to have fallen apart in late 2018 when losses could no longer be sustained by new investments, though Coin Signals allegedly asserted that the funds had been hacked to lull any investor suspicion.
The complaint seeks an injunction that the defendant and affiliates be barred from engaging in investment practices, civil penalties, disgorgement of benefits, restitution, rescission of any contracts, and an accounting.