The United States cryptate law firm Silver Miller filed a lawsuit against an alleged crypt hedge fund manager who would have operated a fake Ponzi regime. The court documents were published on the Silver Miller website on December 26th.
The case – which was filed with the New York District Court of New York on behalf of multiple actors who have invested in the scheme – claims that Jeremy Spence, along with a small cohort of accomplices, orchestrated a "false entity called" Signals of Coin ". Spence is presumably misleadingly interpreted as a successful crypto trader. Reportedly, he offered investors in his "profitable returns" scheme that he claimed had been generated by the series of encrypted hedge funds he was supposed to manage.
These hedge funds would have included an "Alts Fund", a "long-term Fund", a "managed entry" to an initial coin offering (ICO) – dubbed "ICO Evermarkets" – and "Coin Signals Mex (CSM) ) Fund ", the last of which is the main objective of the case.
In fact, he argues, the returns were not profits from investments, but "they were simply reallocation to older investors of the assets of new investors" in a classic Ponzi scheme configuration. As court documents state, Spence defended his investors' questions with apologies – such as hacks and family emergency situations – to "stop time and track his next move".
The CSM Fund, as per Silver Miller, has not been registered as a hedge fund with any US regulatory authority and has not complied with any of the regulatory requirements that a legitimate investment fund is obliged to follow. At its peak, the CSM Fund, in particular, would hold up to 1,300 Bitcoins (BTC) deposited by the investors of the scheme – currently valued at over $ 10 million.
When the CSM fund regime began to collapse towards the end of 2018, Spence would have prevented fund participants from withdrawing their assets. The case therefore "asks the Court to cancel investments in fraudulent funds of the Coin Signals, return to investors their cryptocurrency, impose a pecuniary penalty to Spence and his collaborators for their fraud and impose a constructive trust on the assets collected by Spence ".
As reported earlier this fall, a federal court in New York ordered a cryptocurrency fund and its chief executive – who reported having requested over $ 600,000 from at least 80 investors – to pay over $ 2.5 millions for the use of a fraudulent Ponzi scheme. The order was running an anti-fraud action filed for the first time by the US Commodity Trade Commission against the fund last year.