A crypto Ponzi scheme that raised $295m from more than 100,000 investors across the globe has led to SEC charges against the four men behind it.

Trade Coin Club was run by Douver Torres Braga and operated between 2016 and 2018. It was a multi-level marketing program that lured investors with the promise that a crypto-trading bot that made “millions of microtransactions” every second would bring minimum returns of 0.35% every day.

Siphoned off

Braga is alleged to have siphoned off investor funds for himself and to enable him to pay a network of Trade Coin Club promoters including the three other men named in the charge – Joff Paradise, Keleionalani Akana Taylor and Jonathan Tetreault. The SEC alleges investor withdrawals came entirely from deposits made by investors.

Braga is said to have received 8,396 bitcoin worth around $55m at the time. Taylor received 735 bitcoin (worth more than $2.6m at the time), and Tetreault received 158 bitcoin (worth more than $625,000 at the time).

The SEC alleges that between them the group violated antifraud, securities regulation, and broker-dealer registration provisions, and is seeking injunctive relief, disgorgement and civil penalties. Jonathan Tetreault has, without admitting or denying the allegations, agreed to settle charges relating to violations of securities and broker-dealer provisions. That settlement is subject to court approval.