“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.”
The Securities and Exchange Commission has charged Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor, and Jonathan Tetreault for the famous fraudulent crypto Ponzi scheme, Trade Coin Club.
Trade Coin Club – 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 – raised more than 82,000 bitcoin – valued at $295 million at the time – from more than 100,000 investors worldwide.
Douver Torres Braga led Ponzi scheme
Douver Torres Braga and Joff Paradise told investors the bot made “millions of microtransactions” every second, and that investors would receive minimum returns of 0.35 percent daily.
According to the SEC, however, Douver Torres Braga siphoned off investor funds for his own benefit and to pay a network of worldwide Trade Coin Club promoters, including Paradise, Taylor, and Tetreault.
Operating as a Ponzi scheme, investor withdrawals came entirely from deposits made by investors, not from any crypto asset trading activity by a bot or otherwise, the SEC claims, further alleging the overall amounts received by each of the defendants:
- Braga personally received at least 8,396 bitcoin of the amounts invested (worth $55 million at the time);
- Paradise received 238 bitcoin (worth more than $1.4 million at the time);
- Taylor received 735 bitcoin (worth more than $2.6 million at the time);
- Tetreault received 158 bitcoin (worth more than $625,000 at the time).
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 around the world and enrich himself by exploiting their interest in investing in digital assets. 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.”
The SEC’s complaint alleges that Braga violated the antifraud and securities registration provisions; Paradise violated the antifraud, securities registration, and broker-dealer registration provisions; and Taylor violated the securities and broker-dealer registration provisions of the federal securities laws.
Jonathan Tetreault settled charges regarding the violation of the securities and broker-dealer registration provisions of the federal securities laws.