SEC freezes assets: Brothers deceive investors with crypto bot scam
The US Securities and Exchange Commission has accused two brothers of defrauding investors and using the money to finance their extravagant lifestyle.
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The US Securities and Exchange Commission (SEC) is suing brothers Jonathan and Tanner A. for attempted fraud. They are alleged to have defrauded more than 80 investors in a fraudulent 60 million US dollar Ponzi scheme. Apparently, they promised their victims the services of a crypto bot.
According to the complaint, between January 2023 and June 2024, the brothers lured more than 80 investors with monthly returns of up to 13.5 percent. They claimed that Jonathan A. had developed a bot that could identify and exploit small price differences in assets on various cryptocurrency trading marketplaces. The funds would flow into a loan pool to provide flash loans for this so-called arbitrage trading. Unless there is a global financial crash, the investment funds are completely safe.
Luxury goods, cars and a 30 million property
According to the Associate Director of Enforcement at the SEC's regional office in Atlanta, Justin Jeffries, the whole scheme was completely fraudulent. The bot never existed. Instead, the brothers paid out nearly $53.9 million of the $61.5 million in investor funds to former investors, in part to perpetuate the fraud. They spent the rest on luxury goods, cars and a condominium worth 30 million dollars.
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Jonathan A. is also accused of disguising his background to gain the trust of investors. He had already been convicted in three cases of securities fraud in the past.
To stop the fraud, the agency on Monday obtained asset freezes on both brothers and their companies GCZ Global LLC and Triten Financial Group LLC. In addition, the SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the defendants.
Overall, such cryptocurrency fraud is apparently a lucrative offense: A report issued in June 2023 by blockchain intelligence firm TRM Labs revealed that investors in the cryptocurrency sector had paid a total of $7.8 billion in snowball and Ponzi scams in 2022 alone.
(kst)
