U.S. SEC Charges Two Brothers in $61.5M Crypto Fraud Case

The United States Securities and Exchange Commission (SEC) has taken legal action against two brothers involved in a $61.5 million cryptocurrency fraud. This move is part of the SEC’s broader efforts to increase regulatory scrutiny within the crypto industry.

The SEC has charged Jonathan and Tanner Adam, who ran companies called Triton Financial Group and GCZ Global. They claimed these companies were legitimate and promised investors significant returns. However, the brothers used these companies to run a fake crypto lending scheme and stole $61.5 million from investors.

The Nonexistent Crypto Trading Bot

According to the SEC’s complaint, the two brothers falsely claimed that Jonathan Adam had developed a “bot” for a crypto trading platform, which allegedly identified arbitrage opportunities. They told investors their funds would be used in a lending pool for flash loans to capitalize on these trades. However, the SEC found that the trading bot was a complete fabrication, and the brothers had misled investors about its existence.

The SEC also alleges that Jonathan Adam deceived investors by providing false information about his background, including concealing a previous conviction for securities fraud on three counts. The complaint details that the fraudulent activities occurred between January 2023 and June 2024, involving over 80 investors enticed with promises of high returns. The brothers reportedly offered a 13.5% monthly return, claiming it was tied to flash loans and trade completions.

Funds Diverted for Personal Gain

Despite the Adam brothers’ promises of high returns, investigations revealed that these claims were entirely false. They were diverted for personal use rather than investing the funds as promised. The brothers allegedly used the money to finance extravagant projects, including a $30 million condominium development and a $1.8 million residential property in Texas.

In light of these allegations, the SEC has secured emergency measures to freeze the assets of the Adam brothers and their companies, GCZ Global LLC and Triton Financial Group LLC. The SEC is now seeking permanent injunctions, the return of ill-gotten gains with prejudgment interest, and civil penalties against the brothers. The complaint was officially filed on August 26 in the US District Court for the Northern District of Georgia.