Securities and Exchange Commission (SEC) officials have outlined a complaint alleging a fraudulent crypto Ponzi scheme resulting in $295 million fraud.
The SEC has detailed charges against Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault, alleging their roles in Trade Coin Club, a Ponzi scheme the SEC alleged raised over 82,000 bitcoin, valued at $295 million at the time, from over 100,000 global investors.
“We allege that Braga used Trade Coin Club to steal hundreds of millions from investors around the world and enrich himself by exploiting their interest in investing in digital assets,” SEC Crypto Assets and Cyber Unit Enforcement Division Chief David Hirsch said. “To ensure our markets are fair and safe, we will continue to use blockchain tracing and analytical tools to aid us in the pursuit of individuals who perpetrate securities fraud.”
The SEC complaint alleges Braga created and controlled Trade Coin Club and promised profits from the trading activities of a purported crypto asset trading bot, additionally alleging Braga and Paradise lured investors with false representations that the bot made “millions of microtransactions” every second, and investors would receive minimum returns of 0.35 percent daily.
According to the SEC, instead of deploying investor funds for the purported trading bot, Braga allegedly siphoned off investor funds for his own benefit and paid a network of global Trade Coin Club promoters that included Paradise, Taylor, and Tetreault.
The SEC complaint seeks injunctive relief, disgorgement, and civil penalties. The SEC filed a second complaint alleging Jonathan Tetreault violated the securities and broker-dealer registration provisions of the federal securities laws.
The SEC indicated Tetreault agreed to settle the SEC’s charges without admitting or denying the allegations.