Connect with us


Decoding the $295 million Ponzi scheme that is the latest on the SEC radar 



Source: Unsplash

On 4 November, The Securities and Exchange Commission (SEC) filed charges against another organization on the count of misleading investors. The SEC charged the founding members of Trade Coin Club for operating a Ponzi crypto scheme and looting investors of $295 million. The SEC alleged that the founders of the so-called organization raised more than 80,000 BTC worth $295 million from over 100,000 investors.

Details of the downfall

Two of the accused founders lied to the investors that they could make daily returns of 0.35% on their cryptocurrency investments through a bot. But these funds were not deployed in the interest of the investors. The funds were transferred for the benefit of the Trade Coin Club promoters across the world.

The regulatory body also alleged that Trade Coin Club operated as a Ponzi scheme, with the founders receiving a total of over 9.5K BTC. The four founders would receive a total of 9,527 BTC worth $55 million, $1.4 million, $2.6 million, and $625,000.

The SEC further charged the members of the organization with violating the antifraud, securities registration and broker-dealer registration provisions of the federal securities laws. The complaint also considered injunctive relief, disgorgement, and civil penalties.

The aftermath of it all…

Fraudulent schemes like the one mentioned above are not unknown in the crypto industry. Regulatory bodies in the United States have been taking action against such tricksters from time to time.

“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,” said David Hirsch, Chief of the Enforcement Division’s Crypto Assets and Cyber Unit.

The Commodity Futures Trading Commission (CFTC) charged two Youtubers in May 2022 with fraudulently soliciting at least $44 million. The Youtubers started a so-called income fund invested in cryptocurrency and other instruments.

Furthermore, the SEC also charged 11 people in August 2022 in relation to a $300 million crypto Ponzi scheme Forsage. Founded by individuals coming from countries as diverse as Russia, Georgia, and Indonesia, this Ethereum dapp robbed investors of more than $300 million.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.

Please select your Email Preferences.

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.