- SEC Freezes Assets
- Scheme Details
- Ponzi Schemes Dominate Crypto Fraud
The U.S. Securities and Exchange Commission (SEC) has brought charges against two brothers for running a $60 million Ponzi scheme.
SEC Freezes Assets
According to the regulator’s filing, Jonathan Adam and his brother Tanner Adam defrauded over 80 individuals by falsely claiming to run a crypto bot that promised a monthly return of 13.5% to anyone putting money in it.
Between January 2023 and June 2024, the two misled investors by claiming their bot could identify arbitrage opportunities across different platforms. They promised that investor funds would be placed in a lending pool to finance flash loans and execute trades, with assets borrowed and returned within a single blockchain transaction.
However, according to Justin Jeffries, Associate Director of Enforcement at the SEC’s Atlanta Regional Office, the bot was entirely fictitious. Instead of trading, the siblings allegedly squandered $53.9 million of the $61.5 million raised. They funded extravagant lifestyles, including buying luxury cars and trucks and building a $30 million condominium.
Scheme Details
The regulator claims that the Adams brothers reassured users of the system that the risk was “virtually non-existent,” barring a global market collapse. In addition, Jonathan allegedly misled his backers by concealing his background, including three previous convictions for securities fraud.
To stop the scheme, the SEC secured emergency asset freezes for the brothers’ companies, GCZ Global LLC and Triten Financial Group LLC.
Ponzi Schemes Dominate Crypto Fraud
In 2023, the amount of crypto directed to scam-related addresses dropped by $1.5 billion, an 11% decline from $13.9 billion in 2022 to $12.5 billion. Ponzi and pyramid schemes remained the most significant fraud subcategories that year.
Recently, the SEC charged NovaTech Ltd. and its principals, Cynthia and Eddy Petion, for defrauding more than 200,000 people. The investors were told their money would be put in safe crypto and foreign exchange markets and that they would receive profits, which never happened.
The SEC is pursuing permanent injunctions against the Adams brothers' companies, the return of all investor funds, and civil penalties. Jonathan has invoked the Fifth Amendment in response to a subpoena for testimony, while Tanner has not produced any documents or made himself available for testimony.
