SEC Charges Trade Coin Club Creators and Promoters with $295 Million Fraud

According to the prosecutors, Trade Coin Club raised money from more than 100,000 investors worldwide.

The Securities and Exchange Commission announced charges against a fraudulent crypto Ponzi scheme that raised more than 82,000 bitcoin, valued at $295 million at the time, from more than 100,000 investors worldwide.

According to the SEC’s complaint, filed in the United States District Court for the Western District of Washington, founders of Trade Coin Club – a multi-level marketing program that operated from 2016 through 2018 – promised profits from the trading activities of a purported crypto asset trading bot, luring investors with false representations that the bot made “millions of microtransactions” every second, and that investors would receive minimum returns of 0.35 percent daily. However, instead of deploying investor funds for the purported trading bot, they allegedly siphoned off investor funds for their own benefit and to pay a network of worldwide Trade Coin Club promoters.

The SEC further alleges that Trade Coin Club operated as a Ponzi scheme and that investor withdrawals came entirely from deposits made by investors, not from any crypto asset trading activity by a bot or otherwise.

“We allege that founder Douver Torres Braga used Trade Coin Club to steal hundreds of millions from investors around the world and enrich himself by exploiting their interest in investing in digital assets,” said David Hirsch, Chief of the Enforcement Division’s Crypto Assets and Cyber Unit. “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,” he concluded.