SEC Charges Two Brothers In A $60 Million Ponzi Scheme

The US Securities and Exchange Commission (SEC) has filed charges against Jonathan and Tanner Adam, accusing the brothers of orchestrating a $60 million Ponzi scheme through a fraudulent crypto asset trading platform.

The SEC announced the charges on 26 August 2024.

The agency obtained emergency asset freezes against the Adam brothers and their respective entities, GCZ Global LLC and Triten Financial Group LLC.

The brothers allegedly misled investors by claiming that they had developed a trading “bot” capable of identifying arbitrage opportunities in the crypto market. The scheme spanned from January 2023 to June 2024, targeting over 80 investors.

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“There Was No Arbitrage Trading Bot”

The SEC said that the brothers had no arbitrage trading bot. Justin Jeffries, Associate Director of Enforcement at the SEC’s Atlanta Regional Office, stated that the entire operation was fraudulent.

The complaint alleges that the brothers misappropriated $53.9 million of the $61.5 million they raised, using the funds to finance their extravagant lifestyles. Among the lavish expenditures were luxury vehicles, recreational vehicles, and a $30 million condominium in Miami.

Look: 👀The SEC just busted two brothers for running a massive crypto scam worth $60 million! Jonathan Adam and his brother, Tanner Adam, allegedly lured in over 80 people by claiming to operate a crypto bot that could net investors 13.5% monthly returns. pic.twitter.com/hMQfk4How6

— Randy 🤑 (@money4randy) August 27, 2024

Jeffries claimed that the scheme was a classic Ponzi operation, where the brothers used new investor funds to make payments to earlier investors. He noted that while some investors received partial repayments, the majority of the funds were diverted to support the brothers’ personal spending.

Notably, Jonathan Adam had also concealed his criminal history from investors. Jonathan has prior convictions for securities fraud, a fact he deliberately kept hidden while soliciting funds for the scheme.

The SEC is now seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the brothers.

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OmegaPro Co-Founder Arrested in Turkey

In another major incident, Andreas Szakacs, co-founder of the now-defunct OmegaPro platform, was arrested in Turkey in July. Szakacs is facing serious allegations of defrauding investors in what authorities believe to be a $4 billion Ponzi scheme.

OmegaPro, founded in 2019 and based in Dubai, was a crypto and forex investment company that promised returns of up to 300% on its paid investment products.

Investors initially saw quick returns on small investments, which led many to reinvest larger sums. However, these accounts were eventually locked, and the company began shutting down accounts on November 7, 2022, halting all withdrawals by November 22—coinciding with the collapse of the crypto exchange FTX.

As reported, illicit blockchain  activity declined by nearly 20%  year-to-date, signaling a positive shift for the cryptocurrency sector. However, certain types of cybercrime, such as stolen funds and ransomware inflows, have been on the rise.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.