Crypto Brothers Accused of Defrauding Investors in $60 Million Bitcoin Ponzi Scheme

The Securities and Exchange Commission (SEC) on August 26, 2024, accused two crypto brothers of creating a Bitcoin Ponzi scheme that defrauded people of $60 million, using the investors’ funds to build a condominium.

The brothers, Jonathan Adam and Tanner Adam, are being ordered to halt an alleged $60 million Ponzi scheme that has affected 80 investors across the U.S. The Ponzi scheme, according to the SEC, started in January 2023, and by June 2024, people had been greatly affected. The brothers are said to have solicited and lured unsuspecting victims with promises of 13.5 percent monthly returns.

They falsely told investors that Jonathan Adam launched a “bot” capable of operating on a cryptocurrency trading platform that could identify arbitrage trading opportunities. They claimed that investors’ funds would be used in a lending pool that would, through smart contracts, fund “flash loans” to complete these arbitrage trades.

According to them, regardless of what happened, those who invested in the idea were guaranteed safe money, and nothing would happen to their funds. However, according to the SEC, no such lending pool existed. Instead, Tanner Adam used investors’ money to invest in housing. Notably, Tanner Adam had been previously convicted of securities fraud.

“The Adam brothers promised their investors high returns on a crypto investment that did not exist, and then used investor funds to make Ponzi-like payments and to purchase designer goods, recreational vehicles, and million-dollar homes,” the SEC alleges.

The duo, GCZ Global, LLC, and Triten Financial Group LLC have been accused of violating the antifraud provisions of federal securities laws and have been charged accordingly.

Many cryptocurrency Ponzi schemes exist today. Today’s Gazette has covered several projects that defrauded investors of their hard-earned money after promising high returns.