SEC Charges Coin Club Founders Ponzi Scheme

T

he US Securities and Exchange Commission (SEC) has filed charges against the founder and three promoters of Trade Coin Club, alleging that they tricked investors into investing money in a fraudulent crypto trading bot.

Chief of the Enforcement Division’s Crypto Assets and Cyber Unit David Hirsch said that Braga abused Trade Coin Club in order to embezzle money from investors who were interested in digital assets. By doing this, he was able to amass a fortune for himself.

“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,” Hirsch added. 

The SEC accused Braga of receiving user funds amounting to 8,396 Bitcoin, valued at $55 million. They allege that Paradise gained $1.4 million, Taylor $2.6 million, and Tetreault around $625,000 from the scheme as well.

Obviously, the value of Bitcoin has tremendously grown since 2016, which means that if they had held on to their coins, they could have gained a lot more money. For example, Braga's 8,396 BTC was worth an incredible $580 million in early November 2021 when the coin hit its peak at around $70,000.

Trade Coin Club, which marketed itself as a membership group for trading bitcoin, was "a multi-level marketing program" that operated from 2016 through 2018 and promised profits from the trading activities of a purported crypto asset trading bot, according to the SEC.

According to the SEC, Trade Coin Club was a multi-level marketing group that operated from 2016 until 2018. They promised their members profits from the trading activities of a crypto asset trading bot. However, it is now believed that these claims were false and that no such bot actually existed.

Though crypto Ponzi schemes are common, the SEC has been stepping up its game to make sure those who participate in them don't get away with it.

Jonathan

An editor at Coincrop

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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.