The founder and three U.S. promoters of Trade Coin Club were charged by the Securities and Exchange Commission with operating a Ponzi scheme that raised 82,000 bitcoins, worth $295 million in 2018, from investors throughout the world.
Charges against four people were brought on Thursday in federal court in Seattle. They claim that Trade Coin Club, founded and run by Douver Torres Braga, was a multilevel marketing scheme that ran from 2016 to 2018 and promised income from a crypto-asset trading bot.
The securities regulator claims that Mr. Braga and his promoters used fraudulent guarantees of daily minimum returns of 0.35% from the trading bot to entice more than 100,000 investors. The SEC allegations claim that the founder, instead of using the funds for the company’s advantage, used them to pay a network of promoters, including Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault, who were also charged.
According to the SEC, the Trade Coin Club used investor deposits to pay withdrawals from the club. This means that the defendants broke several federal securities laws, including those relating to anti-fraud, securities registration, and broker-dealer registration.
Trade Coin Site Suddenly Offline
It is no longer possible to visit the website for Trade Coin Club, which advertised itself as a membership organization for trading bitcoin. Both Ms. Taylor, who resides in Hawaii, and Mr. Braga, who currently resides in Brazil, were unavailable for comment.
Mr. Paradise is identified as the founding partner and “master distributor” of Trade Coin. His stated phone lines weren’t answered when calls were made to them, and he didn’t immediately reply to requests for comment.
SEC Cracking Down On Crypto In November
The charges follow a statement by SEC Chairman Gary Gensler this week that emphasized the agency’s regulatory efforts in the cryptocurrency sector. In the fiscal year that ended on September 30 of this year, the SEC collected $6.4 billion in record-breaking financial penalties across all industries. It highlights the chairman’s attention on high-profile cases with severe sanctions for wrongdoing that broke the previous record, established in fiscal 2020, by almost 40%.
These charges come at a period where we have seen a trend of crypto hacks and many calls for regulating the crypto industry by many Jurisdictions including the UK, South Africa, and Costa Rica.
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