U.S. SEC Charges 4 For Defrauding Users $295 Million

The U.S. Security and Exchange Commission (SEC) has filed a civil complaint against Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault for operating a fraudulent Ponzi scheme operating under Trade Coin Club that scammed over 100,000 investors of 82,000 Bitcoin valued at $295 million.

Reports from the United States District Court for the Western District of Washington revealed that Torres Braga started Trade Coin Club in 2016 through 2018. And he has been able to lure many investors into the multi-level platform that accurately trades using trading bots.

The SEC also alleged that Braga and Paradise lured investors with false representations that the bot made “millions of microtransactions” every second and that investors would receive minimum returns of 0.35 per cent daily. Braga allegedly siphoned off investor funds for his benefit and used part of the funds to engage the services of a network of worldwide Trade Coin Club promoters, namely, Taylor, Tetreault, and Paradise. 

Contrary to the representation of their services, the authority revealed that Trade Coin Club had no trading bot. Instead, it used deposits of new downlines to pay existing investors; this makes it a typical Ponzi scheme program.  David Hirsch, Chief of the Enforcement Division’s Crypto Assets and Cyber Unit, said:

“We allege that Braga used Trade Coin Club to steal hundreds of millions from investors worldwide and enrich himself by exploiting their interest in investing in digital assets. He added, “To ensure our markets are fair and safe, we will continue to use blockchain tracing and analytical tools to aid us in the pursuit of individuals who perpetrate securities fraud.”

Compositions of the Case, Their Offence, and SEC Investigative Team

Braga, the lead of the group, was alleged to have violated the anti-fraud and securities registration provisions. On the other hand, Taylor and Tetreault violated the Securities and Broker-Dealer registration provisions of the Federal Securities Laws.

The SEC investigation team for this case was spearheaded by Serafima K. McTigue of the Crypto Assets and Cyber Unit alongside his partner, Victor Hong of the San Francisco Regional Office.

Other support staff are Steven Buchholz, Mr Hirsch, and Jorge G. Tenreiro of the Crypto Assets and Cyber Unit.

The SEC’s Office of Investor Education and Advocacy (OIEA) and the Division of Enforcement’s Retail Strategy Task Force (RSTF) have issued and admonished the public to be careful with any crypto-based platform with a subtle value proposition that promotes Ponzi pyramid schemes.

SEC’s Scope Of Operations

SEC is an age-long commission domiciled in the United States with the mandate to positively impact America’s economy, capital markets, and people’s lives. They do this by enforcing the law against market manipulation. And it’s the aftermath of the Wall Street crash in 1929. For over 93 years, SEC has protected investors, maintained fair, orderly, and efficient markets, and facilitated capital formation. 

Investors wishing to invest in any business are advised to do due diligence via Investor.gov. With this tool, investors can get more information about digital assets and crypto investment schemes, including the warning signs of fraud.