The U.S. Securities and Exchange Commission (SEC) has filed charges against Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor and Jonathan Tetreault for their roles in Trade Coin Club. This fraudulent crypto Ponzi scheme collected more than 82,000 Bitcoin worth $295 million from more than 100,000 investors worldwide. Like all MLM Ponzi schemes, Trade Coin Club enriched only its owners and top promoters. Brage fled Florida for Brazil behind MLM notes.
According to the SEC’s complaint, Dover Torres Braga founded and controlled Trade Coin Club. This MLM program ran from 2016 to 2018, promising profits from the trading activities of a purported crypto-asset trading bot. The SEC alleges that Braga and Paradise lured investors with false representations that the bot was conducting “millions of microtransactions” every second and that investors would receive a minimum daily return of 0.35 per cent. However, instead of using investors’ funds for the purported trading bot, Braga allegedly diverted investors’ funds for his benefit and to pay a network of global Trade Coin Club promoters, including Paradise, Taylor, and Tetreault.
The SEC also alleges that Trade Coin Club operated as a Ponzi scheme and that investor payouts came solely from deposits made by new investors and not from trading cryptocurrencies through a bot or otherwise. The complaint further alleges that Douver Torres Braga personally received at least 8,396 bitcoin of the amounts invested (worth $55 million at the time), Joff Paradise received 238 bitcoin (worth more than $1.4 million at the time), Keleionalani Akana Taylor received 735 bitcoin (worth more than $2.6 million at the time). Jonathan Tetreault received 158 bitcoin (worth more than $625,000 at the time).
The SEC’s complaint seeks injunctive relief, restitution, and civil fines. The SEC filed a second lawsuit accusing Jonathan Tetreault of violating federal securities laws and broker/dealer registration requirements. Tetreault has agreed to settle the SEC’s charges without admitting or denying the allegations. The settlement is subject to court approval.