- Promises of 13.5% Monthly Returns
- Use of Investor Funds for Luxury Lifestyle
- Hiding Past Frauds
The SEC has filed a complaint against brothers Jonathan and Tanner Adam, accusing them of running a crypto Ponzi scheme worth over $61 million through their firms GCZ Global LLC and Triten Financial Group LLC.
Promises of 13.5% Monthly Returns
According to the SEC lawsuit, the brothers convinced and lured victims by promising a monthly investment return of up to 13.5%. They lied to investors about creating a crypto bot that supposedly operated on a crypto trading platform, identifying arbitrage trading opportunities. The brothers claimed investor funds would be used in a lending pool to finance flash loans through smart contracts to execute these arbitrage trades. However, the SEC alleges that no such lending pool exists.
Use of Investor Funds for Luxury Lifestyle
The lawsuit states that the brothers used investor funds to pay returns to existing investors and to finance their own luxurious lifestyle. Tanner used the funds to pay for building a $30 million condominium in Miami. Jonathan was accused of using investor funds to buy cars, recreational vehicles, and trucks. Additionally, the brothers were alleged to have used $1.8 million of investor funds to build houses in Texas for their parents and Jonathan's in-laws.
Hiding Past Frauds
The SEC complaint highlights that Jonathan hid his past with three counts of securities fraud conviction to gain investors' trust. The SEC alleges that the Adam brothers promised their investors high returns on a non-existent crypto investment, then used investor funds to make Ponzi-like payments and purchase luxury goods, recreational vehicles, and million-dollar homes.
The SEC stated that they will use all available tools to stop those exploiting new technologies to scam investors.
