Global Crypto Ponzi: SEC Files Charges Against Trade Coin Club Creator, Promoters

The Securities and Exchange Commission (SEC) has filed charges against the creator and promoters of the Trade Coin Club, which is described as a “global crypto Ponzi scheme.”

According to the SEC, the alleged ponzi scam raised $295 million from more than 100,000 investors around the world from 2016 to 2018.

The complaint states that in early 2018, Trade Coin Club announced that it would discontinue services to U.S. residents. Soon the company ceased providing redemptions to any investors in Bitcoin and instead required investors to withdraw assets in “TCoin,” described as a new crypto asset issued by Trade Coin Club, which “ultimately became worthless.”

The SEC has charged Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault for the alleged scam.

The Trade Coin Club apparently promised investors they would gain from a “crypto asset trading bot.” The complaint claims that evidence confirms that Trade Coin Club did not earn returns from any crypto asset trading, let alone a trading “bot.”

The SEC alleges that investors were lured by the representation that this bot made “millions of microtransactions every second and that investors would receive minimum returns of 0.35 percent daily.”

The SEC claims that instead of using investor funds to trace crypto, Braga allegedly siphoned off the funds for his own benefit and to pay a network of Trade Coin Club promoters, including Paradise, Taylor, and Tetreault.

The SEC’s complaint alleges that Braga personally received at least 8,396 Bitcoin of the amounts invested (worth $55 million at the time) with Paradise receiving 238 Bitcoin (worth more than $1.4 million at the time), Taylor receiving 735 Bitcoin (worth more than $2.6 million at the time), and Tetreault receiving 158 bitcoin (worth more than $625,000 at the time).

Multiple laws were apparently violated during the ploy.

The complaint seeks injunctive relief, disgorgement, and civil penalties. The SEC filed a second complaint alleging that Tetreault violated securities registration provisions, and without admitting or denying the allegations, Tetreault agreed to settle the SEC’s charges. The settlement is subject to Court approval.

 

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