SEC Charged Two Brothers for $60 Million Crypto Ponzi Scheme: Here’s The Report

With the increasing popularity of cryptocurrency trading, the number of crypto scams is also rising. Crypto users who are either new to the industry or who are hunting for shortcuts have become the victims of frauds like crypto Ponzi schemes, pig butchering, and many others.

One example is the former Kansas bank CEO sentenced to 24 years after losing millions in pig butchering scams. More importantly, he stole this money from the bank. And now, the SEC has charged two brothers with embezzling $60 million in a Ponzi scheme involving fake crypto bots.

80 People Scammed in $60 Million Crypto Ponzi Scheme

As per the US SEC filing, two brothers, Jonathan Adam and Tanner Adam, running GCZ Global LLC and Triten Financia Group LLC, have been charged for a $60 Million crypto Ponzi scheme which has impacted around 80 people.

Jonathan, who has been convicted thrice for securities fraud, faked his background to win investors’ trust. As a result, he and his brother were booked for fraud on August 26  in the US District Court for the Northern District of Georgia.

This crypto scam went on between January 2023 to June 2024, running for more than a year. In which, Janathan and Tanner scammed 80 crypto investors with promises of 13.5% monthly returns. These swindlers lied about developing automated crypto trading bots to identify arbitrage trading opportunities.

Moreover, they claimed to use the investor’s funds as a lending pool through Smart Contracts and fund flash loans to fund the arbitrage trades. However, per the SEC investigation, no such pool exists, and the user’s funds were used for personal gains.

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.

Crypto Ponzi Scammed Money Used For Cars and Condominiums

The Adam brothers have assured the investor’s safety of their investments. They promised to lock the funds into the Smart Contracts immediately without anyone being able to access them. However, that is not what happened.

These two succeeded in raising $61.5 Million worth of investors’ funds. Out of which, $53.9M, was used for personal gains and in interests, finders fees, and even returning principals. However, the complaint alleges the building of a $30 Million Condominium in Miami, another $1.8 Million for building a house in Texas, and $480,000 to buy cars, trucks, and other recreational vehicles.

The condominium and the Texas family house are subjected to Tanner Adam. However, the $480,000 is used by Jonathan Adam for luxurious cars and vehicles. Moreover, the SEC revealed that the official accounts are left with only $400,000 worth of investors’ money, and the rest is exhausted for a variety of personal uses.

The officials are actively involved in the crypto regulations, where recently SEC cracked down On Abra for unregistered crypto offerings. With this, the demand for stricter rules and regulations is out among investors, who fear losing their hard-earned money.

Final Thoughts

With the rising crypto Ponzi scheme crimes, another $60 Million embezzlement case has come to attention. With this, the SEC charged two brothers with robbing 80 crypto investors. The scammers presented a 13.5% return on investment and safety of their funds until the contract period ends. They lured the crypto investors with a fake automated crypto bot and launch pool to loan to the arbitrage traders.

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Pooja Khardia

With years of love for reading and 5 years of content writing experience, I’m here, working on my favorite writings about cryptocurrency. I’m actively looking for trending topics and informational statistics to curate the best content pieces for crypto enthusiasts. Staying updated with trends and learning the basis and advancements of this field is the best part of the day.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.