28 AUG 2024 / ALL REGULATORY UPDATES

SEC Cracks Down on $60 Million Crypto Ponzi Scheme

In a dramatic twist, the SEC has frozen the assets of Jonathan Adam from Angleton, Texas, and his brother, Tanner Adam of Miami, Florida, along with their companies, GCZ Global LLC and Triten Financial Group LLC. The brothers are accused of running a $60 million crypto Ponzi scheme that deceived over 80 investors across the country. From January 2023 to June 2024, they promised investors up to 13.5% monthly returns, claiming that Jonathan had developed a “bot” to find arbitrage opportunities on a crypto trading platform. They assured investors their funds were safe, short of a global market meltdown.

But here's the kicker: the alleged lending pool and "bot" were complete fabrications. According to the SEC, the Adams funneled millions from investors to sustain their lavish lifestyles. Tanner reportedly used the funds to build a $30 million Miami condo, while Jonathan spent at least $480,000 on cars, trucks, and recreational vehicles.

“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,” said Justin C. Jeffries of the SEC’s Atlanta Regional Office.

Filed on August 26, 2024, in the Northern District of Georgia, the SEC’s complaint charges the brothers and their companies with violating antifraud provisions of federal securities laws. The SEC is now pursuing permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. This case is a strong reminder for all investors: if it sounds too good to be true, it probably is. View full press release from here.