The US Securities and Exchange Commission (SEC) has intensified its crackdown on fraudulent crypto activities. The agency’s latest enforcement actions target the operators of Triten Financial Group and GCZ Global, Jonathan and Tanner Adam.
The SEC alleges that the Adam brothers misappropriated $61.5 million from investors under the guise of a crypto asset lending program.
Adam Brothers Bought a Condominium With Investors’ Funds
From January 2023 through June 2024, the Adam brothers allegedly enticed over 80 investors with the promise of high returns. They offered a tempting 13.5% monthly return through lending pools supposedly designed to fund flash loans and complete trades. However, the SEC’s investigation reveals these claims were baseless, with the funds being diverted to personal use rather than the promised crypto operations.
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SEC discovered that the alleged trading bot central to the operation did not exist. Instead, funds were used for extravagant expenditures such as constructing a $30 million condominium and over $1.8 million on a residential property for Jonathan Adam and his family in Texas.
“The Adam Brothers’ dissipation of assets has continued into June 2024, and less than $400,000 in investor funds remain in bank accounts controlled by the Adam Brothers,” the SEC alleges.
As the fraudulent activities came to light, the SEC took swift action. It secured emergency asset freezes against both Triten Financial Group LLC and GCZ Global, LLC. These measures aim to halt further financial drain and protect the remaining investor funds.
Furthermore, the SEC has brought legal actions against the Adam brothers for violations of anti-fraud provisions under federal securities laws. The Commission is seeking permanent injunctions, forfeiture of the misappropriated funds, and civil penalties.
Concurrently, the SEC settled with crypto firm Abra, which faced charges in July 2020 for operating as an unregistered investment company. Abra’s Earn program, which involved nearly $600 million in assets primarily from US investors, was marketed as an easy way to earn interest on crypto assets. However, it allegedly operated without the necessary SEC registrations, depriving investors of crucial disclosures and protections.
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Stacy Bogert, Associate Director of the SEC’s Division of Enforcement, stressed the severity of Abra’s violations.
“As alleged, Abra sold nearly half a billion dollars of securities to US investors, without complying with registration laws designed to ensure that investors have sufficient, accurate information to make informed decisions before they invest. This matter reflects yet again that, in conducting enforcement investigations, we are governed by economic realities, not cosmetic labels,” Bogert said.
As part of the settlement, Abra consented to an injunction prohibiting future violations and agreed to settle civil penalties. The court will determine the penalty amount.
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