U.s. authorities accept brought criminal charges against a crypto trader whom they say defrauded investors out of over $five million.

The Department of Justice announced on Tuesday that it had arrested Jeremy Spence. Between 2017 and 2019, 24-year-old Spence operated a crypto investment scheme under the proper name "Money Signals," primarily via Twitter and Discord.

The announcement quoted Federal Bureau of Investigation Assistant Director-in-Accuse William Sweeney every bit saying:

"As alleged, Jeremy Spence misrepresented the success of his investment platform in club to entice people to ship coin his manner. Because his trading was less than profitable and significantly less successful than he represented to investors, he used coin from new investors to pay off others in order to go along his plan moving — a typical marker of a Ponzi scheme.

The criminal complaint unveiled alongside the announcement further explained that Spence had claimed to be conducting highly lucrative trades via crypto exchange BitMEX, whose leadership was arrested in October 2020 on charges of facilitating money laundering. The FBI alleges that Spence deceived investors with claims of using BitMEX'due south perpetual contracts to achieve high rates of return.

In November 2018, while Spence was falsifying evidence of roughly 1,000 BTC in his fund, information technology never exceeded 11 BTC, the authorities say. Spence faces ten years in prison for commodities fraud and twenty years for wire fraud.

Though these are criminal charges from the DoJ, the proclamation thanks the Commodity Futures Trading Commission for its help with the investigation. In contempo years, the CFTC has been working to scale up its power to identify unregistered or illegal investment schemes based on crypto derivatives. That has largely depended on new analytics platforms that tin can sift through parts of the web that traditional CFTC investigators are still trying to familiarize themselves with.