A crypto trader who referred to himself as 'Coin Signals' was slapped with a 42 month prison sentence for defrauding 170 people

A 25-year-old Rhode Island trader known by the nickname "Coin Signals" was sentenced to 42 months in prison for defrauding 170 people of more than $5 million.

This week, Jeremy Spence was sentenced to prison for running a scam that lasted from November of last year to April of this year. According to a Justice Department press release, Spence solicited money from eager investors, claiming that his trades were far more profitable than they were.

The Coin Signals Bitmex Fund, the Coin Signals Alternative Fund, and the Coin Signals Long Term Fund were all created and operated by Spence. The investors would transfer the coins to the other person.

According to a court filing, the trades were generating high returns, but that was not the case.

To cover up their net losses, the investors were deceived with fake account balances. New funds obtained from fresh crops of investors were used to cover up losses and pay out cash to old investors to keep the ruse going.

The DOJ said that Spence continued to fudge account balances to make investors think they were making money when they weren't.

Spence pleaded guilty to the scam last November.

After his release, he will have to pay over $2 million in restitution.

The sentencing of Spence is the latest in a series of high-profile crimes. Heather Morgan and her husband were accused of money-laundering. The duo was arrested on February 8 at their apartment in New York City on charges related to the Bitfinex hack.