The latest reports indicate that the Federal Bureau of Investigation (FBI) has started criminal trial charges against a 24-years crypto trader. The crypto trader, Jeremy Spence, has allegedly defrauded investors at least $5 million using derivatives strategy on BitMEX, according to FBI findings.
On 26 January 2021, the Department of Justice announced that detectives have arrested Spence and he is now awaiting trial charges against him. FBI is convinced that the trader operated a crypto investment scheme under the name ‘Coin Signals’ primarily via Twitter while he committed the act between 2017 and late 2019.
According to the FBI Assistant Director-in-charge, William Sweeney, the crypto trader channeled used the money from the newbies to pay-off others which somewhat created a Ponzi scheme. William Sweeney revealed:
‘As alleged, Jeremy Spence misrepresented the success of his investment platform to entice people to send money his way. Because his trading was less profitable and significantly less successful than he represented to investors, he used money from new investors to pay-off others to keep his plan moving-taking marker of the Ponzi scheme.’
Interestingly, the findings have indicated that Spence claimed to be conducting highly lucrative trades via BitMEX. His claims had led to the arrest of some of the top BitMEX executives who faced trial on charges of facilitating money laundering in October 2021.
More FBI findings have indicated that Spence deceived investors with allegations that he uses BitMEX perpetual contracts to get a high rate of gains. In November 2018, Spence claimed to have 1000 BTC in his wallet. But, the authorities discovered that he had been unscrupulous because his wallet had never exceeded 11 BTC.
Spence now faces 10 years in prison for commodities and 20 years for wire fraud to serve as an example for other crypto criminals who dupe unsuspecting investors.
The Nature Of Commodity And Wire Fraud Charges
Although commodities frauds are categorized under criminal charges, they differ slightly on investigation processes. Commodity and Wire trials primarily rely on a special commission Commodity Futures Trading Commission (CFTC). The CFTC conducts thorough investigations in such matters.
In recent years, the CFTC has been working to scale-up its efficiency and ability to identify unregistered and illegal schemes based on crypto derivatives. In that context, CFTC has mainly depended on new analytics’ platforms that can examine parts of the web that traditional CFTC investigators are still trying to familiarize themselves with.