This crypto ponzi scheme redefined the lengths brothers would go for each other.
In crypto news today, the US SEC has filed charges against two brothers, accusing them of running a $60 million crypto Ponzi scheme centered around a non-existent trading bot.
In a complaint dated August 26, filed in the U.S. District Court for the Northern District of Georgia, the SEC alleges that Jonathan and Tanner Adam convinced over 80 investors to pour their money into a fictitious crypto bot, promising them a staggering 13.5% monthly return.
From January 2023 to June 2024, the brothers allegedly assured investors that their bot could detect arbitrage opportunities across different crypto platforms, allowing it to buy and sell assets simultaneously to capitalize on small price differences in various markets.
The SEC claims the brothers enticed investors with promises that their funds would be pooled into a lending fund for flash loans, enabling trades where assets would be borrowed and repaid within the same blockchain transaction. However, according to Justin Jeffries, Associate Director of Enforcement in the SEC’s Atlanta Regional Office, the entire scheme was a sham—the bot never existed.
Instead of delivering on their promises, the brothers allegedly squandered $53.9 million of the $61.5 million they raised. Although some investors did see returns, the bulk of the money went toward funding an extravagant lifestyle, including buying luxury cars, trucks, and a $30 million condo.
Jeffries stated:
“As we allege, the Adam brothers promised their investors high returns on a crypto investment that did not exist, and then used investor funds to make Ponzi-like payments and to purchase designer goods, recreational vehicles, and million-dollar homes.”
To prevent further misuse of funds, the SEC has secured emergency asset freezes on the brothers’ companies, GCZ Global, LLC, and Triten Financial Group LLC.
The SEC also highlights that the brothers claimed investing with them was “virtually risk-free,” barring a global market collapse. Additionally, Jonathan Adam is accused of lying about his background, omitting his three prior securities fraud convictions to gain investors’ trust.
The SEC has charged Jonathan and Tanner Adam with violating the antifraud provisions of federal securities laws and is seeking permanent injunctions against their companies, the forfeiture of all investor funds, and civil penalties.
This case is part of a broader trend: In 2022 alone, a staggering $7.8 billion was funneled into cryptocurrency pyramid and Ponzi schemes worldwide, according to blockchain intelligence firm TRM Labs.
