SEC Charges 4 People in $295M Crypto Ponzi Scheme

Do you think the mice in my apartment will opt for my new crypto business?

Skeptics and critics of blockchain often deride cryptocurrency as a whole as a great pyramid system. And although this point may have some room for debatethe Securities and Exchange Commission officially adds at least one more crypto firm to the ever-growing list operations “definitely a scam”.

The second charges announced against four people in a fraudulent crypto-themed Ponzi scheme called “Trade Coin Club” on Friday. Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor and Jonathan Tetreault face civil fines, as well as other penalties, in US District Court in Seattle.

Trade Coin Club, which was founded by Braga, operated from 2016 to 2018 as a multi-level marketing program. And at that time, the deposits show the scheme defrauded more than 100,000 people out of 82,000 bitcoins, worth around $295 million, according to the SEC complaint.

Braga and his team of promoters reportedly lured investors by claiming their money would be managed by a financial bot that performed “millions of microtransactions” per second. And thanks to the magic bot (read: non-existent), those same brands learned that they would receive a minimum of 0.35% return on their investment every day, the Commission said. But instead of putting the raised funds into a crypto investment account run by super-fast trading AI, the SEC says Braga and co. pocketed it instead.

Additionally, in classic Ponzi style, the money a subset of investors were able to withdraw allegedly came from contributions from other investors, not from crypto trading activity.

“We allege that Braga used Trade Coin Club to rob hundreds of millions of investors around the world and enrich themselves by exploiting their interest in investing in digital assets,” said David Hirsch, Head of Assets Unit. cryptographic and cyber application of the Commission.

In total, the SEC says Braga walked away with $55 million worth of crypto, while Paradise got $1.4 million, Taylor got $2.6 million, and Tetreault brought in $625,000. If the defendants are found liable in the case, they will have to return those funds and pay hefty civil fines. And, they will be prohibited from participating in any other multi-level marketing venture or crypto investment transaction.

The alleged Trade Coin Club scam is far from the first Ponzi scheme to appear in the crypto-verse in recent years. In fact, it’s so common for outlets covering blockchain to have how-to articles to help readers. try to recognize and avoid diets.

In August, the SEC filed another round of indictments against 11 people accused of stealing $300 million in a similar fraudulent scheme. And, between January 2021 and April 2022, the Federal Trade CommisZion reported that Americans lost over $1 billion to crypto-related scams.

So remember: if it sounds too good to be true, this likely is. And often a Trade Coin Club can turn into a Betrayed Coin Club.


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