The U.S. Securities and Exchange Commission (SEC) has charged a pair of brothers with running a $60 million Ponzi scheme for automated arbitrage by running a cryptocurrency bot that claimed to earn investors 13.5% monthly returns. , and currently more than 80 investors in the United States have been defrauded. The brothers are accused of using investors' money to spend extravagantly, including buying luxury cars and a multimillion-dollar condo.
Fake trading robot arbitrage scam, investors mistakenly believe that "investment risks do not exist"
According to the SEC's charges, from January 2023 to June 2024, the brothers claimed that their trading robot was able to identify arbitrage opportunities on the cryptocurrency platform, take advantage of currency price differences between different markets, and buy and sell simultaneously. assets.
The deceived investors promised to invest their funds in a lending pool to maintain the operation of flash loan transactions, and also informed investors that the funds would be borrowed from them in the same blockchain transaction. funds and return them immediately.
(Note: "Flash Loan" is a type of cryptocurrency loan without collateral. The borrower borrows funds in the same block transaction and returns them immediately)
At the same time, the brothers told investors: "Unless there is a global market crash, investment risks are almost non-existent."
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"Cryptocurrency bots don't exist" Brothers scammed and squandered
The SEC said: "This trading scheme is completely fraudulent and the cryptocurrency robots claimed by the brothers do not exist."
Justin Jeffries also said: "Of the $61.5 million raised by the brothers, $53.9 million was misappropriated privately. Although the investors recovered some of the funds, most of the funds were used for the brothers' extravagant consumption, including the purchase of cars and trucks. and the construction of a $30 million condo tower.”
SEC takes active action to prevent fraud and urgently freezes assets
In order to stop this plan, the SEC issued an emergency freeze of the brothers' company assets. The SEC alleges that one of the brothers misrepresented his background and concealed a past criminal record of three securities fraud convictions in order to gain the trust of investors.
Justin C. Jeffries, deputy director of the Enforcement Division of the SEC’s Atlanta Regional Office, said: “The SEC will take any steps to prevent the use of any new technology to commit investment fraud.”
The SEC has now filed a lawsuit accusing the brothers and their companies of violating the anti-fraud provisions of federal securities laws. It also seeks a permanent injunction, disgorgement of ill-gotten gains and forfeiture of funds raised from investors, and civil penalties.
SEC freezes assets urgently, two brothers face legal sanctions
To stop the scam, the SEC has imposed emergency asset freezes on the brothers' companies, GCZ Global and Triten Financial Group. The SEC also accused Jonathan Adam of misrepresenting his personal background to gain the trust of investors and failing to disclose three of his previous convictions for securities fraud.
The SEC charged them with violating the anti-fraud provisions of the federal securities laws. The SEC is seeking a permanent injunction against the brothers, forfeiture of all funds taken from investors and civil penalties.
This article "It is impossible to compensate for arbitrage" American brothers set up a trading robot scam, and the SEC filed a claim of US$60 million. It first appeared on Chain News ABMedia.
