Coinspeaker SEC Charges Brothers in $60M Crypto Ponzi Scheme Targeting Over 80 Investors
Two brothers are facing serious charges from the United States Securities and Exchange Commission (SEC) for allegedly defrauding more than 80 investors in a massive $60 million Ponzi scheme.
According to an official press release, the brothers, Jonathan Adam and Tanner Adam allegedly lured victims by claiming that one of them had developed a sophisticated trading bot designed to profit from crypto asset arbitrage opportunities.
A Crypto Trading Bot That Never Existed
The SEC disclosed that the Adam brothers promised investors high returns of approximately 13.5% per month through an automated bot they claimed would operate on a crypto asset trading platform.
This “bot” was supposed to identify small price differences in cryptocurrencies across various markets and execute trades to generate profits. However, the Commission alleges that the bot never existed. Instead, the Adam brothers used new investors’ money to pay off earlier investors — a typical Ponzi scheme setup.
According to the market watchdog, this scheme ran from January 2023 to June 2024, successfully defrauding 80 investors across the United States. These unsuspecting investors trusted Jonathan and Tanner to honor the terms of the deal as promised but instead lost their money in the process.
The financial regulator also alleged that Jonathan withheld critical information about his background. The SEC claims that he failed to disclose his previous conviction on three counts of securities fraud to gain investors’ trust to join the scheme.
Lavish Lifestyles
Additionally, the securities watchdog claims that Jonathan and Tanner used investor funds to finance their lavish lifestyles. According to the regulator, one of the brothers used investor money to make a down payment on a $30 million condominium in Miami, while the other spent at least $480,000 on cars, trucks, and recreational vehicles.
“As we allege, the Adam brothers promised their investors high returns on a crypto investment that did not exist, and then used investor funds to make Ponzi-like payments and to purchase designer goods, recreational vehicles, and million-dollar homes,” said Justin C. Jeffries, Associate Director of Enforcement in the SEC’s Atlanta Regional Office.
The SEC has obtained emergency relief to freeze both brothers’ personal assets, as well as the assets of their respective companies, GCZ Global LLC and Triten Financial Group LLC.
Given the severity of the alleged crimes, the SEC is seeking permanent injunctions, the disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the Adam brothers. The complaint was filed on August 26 in the US District Court for the Northern District of Georgia.
The SEC has also issued a warning to other malicious actors, noting that it would use all necessary measures and tools to “stop those who exploit the excitement around new technologies to defraud investors.”
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SEC Charges Brothers in $60M Crypto Ponzi Scheme Targeting Over 80 Investors