The Securities and Exchange Commission has issued charges against individuals involved in the Trade Coin Club, fraudulent crypto Ponzi scheme, including creator Douver Torres Braga, as well as Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault.
According to the US regulator, the scam raised over 82,000 bitcoin, which at the time was valued at $295 million at the time, from over 100,000 investors worldwide.
In the official complaint, SEC explains that the multi-level marketing program, created by Braga, ran between 2016 through 2018. The scheme promised profits from the trading activities of a purported crypto asset trading bot.
The Commission alleges that Braga and Paradise attracted investors with false representations that the bot made “millions of microtransactions” every second. Furthermore, they told investors, that they would receive minimum returns of 0.35% daily.
However, Braga allegedly used the investor funds for his own benefit and to pay a network of worldwide Trade Coin Club promoters, including Paradise, Taylor, and Tetreault.
The SEC stated that Trade Coin Club operated as a Ponzi scheme. It explained that investor withdrawals came only from deposits other investors made and not from any crypto asset trading activity by a bot.
SEC said:
The complaint further alleges that Braga personally received at least 8,396 bitcoin of the amounts invested (worth $55 million at the time), Paradise received 238 bitcoin (worth more than $1.4 million at the time), Taylor received 735 bitcoin (worth more than $2.6 million at the time), and Tetreault received 158 bitcoin (worth more than $625,000 at the time).
David Hirsch, Chief of the Enforcement Division’s Crypto Assets and Cyber Unit, added:
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. 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.
According to the complaint, that Braga violated the antifraud and securities registration provisions. Paradise is charged with fraud and Paradise, Taylor, and Tetreault have all been charged with securities registration, and broker-dealer registration violations of the federal securities laws. The SEC seeks injunctive relief, disgorgement, and civil penalties. Without admitting or denying the allegations, Tetreault has agreed to settle the charges.
Earlier in August, SEC charged 11 people in a $300 million crypto pyramid scheme.
