SEC Charges Trade Coin Club Founder, Promoters in $295 Million Bitcoin Fraud
The Securities and Exchange Commission filed charges against the founder and three American promoters of Trade Coin Club, alleging that the crypto trading membership club operated as a Ponzi scheme that collected 82,000 bitcoins, worth $295 million in 2018, from investors worldwide.
The indictments against four people, filed Thursday in federal court in Seattle, allege that Trade Coin Club, created and controlled by Douver Torres Braga, was a multi-level marketing scheme operated between 2016 and 2018 that promised profits from a crypto-asset trading robot.
The Securities and Exchange Commission alleges that Braga and his promoters lured more than 100,000 investors with false promises of daily minimum returns of 0.35% from the trading robot. Instead, the founder allegedly used the money for his own benefit and to pay off a network of promoters, including Joff Paradise, Keleionalani Akana Taylor and Jonathan Tetreault, who were also charged, according to the SEC complaints.
Trade Coin Club paid withdrawals from the club with investor deposits, the SEC said.
The SEC said the individuals violated federal securities laws and faced charges including anti-fraud, securities registration and broker-dealer registration violations.
The website of the Trade Coin Club, which marketed itself as a bitcoin trading membership group, is no longer available. Mr. Braga, who currently lives in Brazil, and Ms. Taylor, who lives in Hawaii, could not be reached for comment. Calls to phone numbers for Mr. Paradise, who is listed as Trade Coin’s founder and “master distributor,” were not returned, and he did not immediately respond to an email request for comment. Mr. Tetreault did not immediately respond to a request for comment.
The charges come after SEC Chairman Gary Gensler highlighted the agency’s regulatory initiatives in the crypto sector in a speech this week. The SEC imposed record monetary penalties across all sectors last fiscal year, collecting $6.4 billion in the 12 months ended Sept. 30. It beat the previous record, set in the 2020 financial year, by almost 40%, underscoring the chairman’s focus on high-profile cases with severe penalties for misconduct.
“Fraud is fraud, regardless of the types of investors you defrauded and the types of securities used in the fraud,” Gensler said in his speech to the Practicing Law Institute on Wednesday.
Write to Mengqi Sun at [email protected]
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