The U.S. Securities and Exchange Commission(SEC) charged brothers Jonathan and Tanner Adam with running a $60 million Ponzi scheme using sham crypto trading bots. The scam affected nearly 80 investors who invested in the said company.
He and Tanner conducted their business through two firms namely GCZ Global LLC and Triten Financial Group LLC. They vowed to help investors earn big profits by employing use of automated crypto bot to hunt for revenue making opportunities. However, the cooperatives utilized the money on personal expenses and for to pay others who had invested in the scheme, which is characteristic to a Ponzi scheme.
The scheme was between January 2023 and June 2024. The brothers tendered themselves that they would give the investors a 13. 5% monthly return rates of their investment. They said that they were using the money to fund smart contracts as well as arbitrage trades. However the SEC was to discover that there was no such thing as a trading pool. The investors’ capital was embezzled thus used to cater for personal needs.
In its complaint, the SEC said that Jonathan Adam, who previously had securities fraud convictions. He deceived customers through providing fake credentials. The scam raised $61. 5 million. Of this, $53,The staff spent $9m on compensations and stole US$2m. They utilized the cash to buy a condominium in Miami worth $30m, a house in Texas worth $1.8m, and $480 000 on cars and other luxuries.
They left $400,000 in the accounts yet spent the big deal of the funds. From this result, it is clearly seen that they did not use the money as stated. Also, they invested the money but did not protect it.
It shows that the occurrence of crypto scams is becoming higher with the expanding of trading in cryptocurrencies. The SEC’s actions prove that there is a need to introduce higher standards in the crypto industry as a way of safeguarding investors from con artists.
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