SEC Charges Brothers Over $60 Million Crypto Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC) has filed charges against Jonathan and Tanner Adam, accusing the brothers of running a $60 million cryptocurrency Ponzi scheme.

According to a complaint filed on August 26 in the U.S. District Court for the Northern District of Georgia, the brothers allegedly lured over 80 investors into the fraudulent scheme by promoting a fake crypto trading bot.

The SEC’s complaint details that from January 2023 to June 2024, the Adams claimed their bot could generate monthly returns of 13.5% by exploiting arbitrage opportunities across different crypto platforms. They promised investors that the bot would buy and sell digital assets simultaneously, taking advantage of small price differences between markets to generate profits. The SEC, however, contends that no such trading bot existed. “The entire trading scheme was fraudulent,” stated Justin Jeffries, Associate Director of Enforcement at the SEC’s Atlanta Regional Office.

The SEC’s filing alleges that the brothers raised $61.5 million from investors and misappropriated $53.9 million of those funds. The complaint states that while some investors received partial returns, the majority of the amount was used for personal luxury purchases, including designer goods, expensive vehicles, and constructing a $30 million condominium. “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 Jeffries.

To prevent further asset dissipation, the SEC has secured emergency asset freezes against the brothers’ companies, GCZ Global, LLC, and Triten Financial Group LLC. According to the complaint, the SEC is pursuing permanent injunctions against the brothers and their companies, the return of all misappropriated funds, and civil penalties.

The complaint also revealed that Jonathan Adam allegedly hid his past criminal convictions from investors, stating that he has three previous securities fraud convictions. The charges come as the agency continues to target fraudulent schemes in the crypto sector.

In a related case, Montenegrin authorities recently arrested Roman Ziemian, co-founder of the FutureNet crypto fraud scheme, which allegedly defrauded investors of $21 million. Ziemian was detained in Podgorica while reportedly living under a false identity. South Korean and Polish authorities are both seeking his extradition on fraud, money laundering, and theft charges.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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