On Monday, the U.S. Securities and Exchange Commission (SEC) charged two brothers with defrauding over 80 investors in a $60 million cryptocurrency Ponzi scheme. This scheme reportedly lasted more than a year.

The SEC froze the assets of Jonathan Adam from Angleton, Texas, and his brother Tanner Adam from Miami, Florida. Their businesses, GCZ Global LLC and Triten Financial Group LLC, are also under scrutiny.

The complaint was filed in the U.S. Northern District Court of Georgia. It accuses the Adam brothers and their companies of violating federal securities laws designed to prevent fraud.

According to the SEC, the brothers misled investors by promising them a 13.5% monthly return from January 2023 to June 2024. They claimed they used a cryptocurrency trading “bot” that could find profitable arbitrage opportunities.

The SEC alleges that the brothers deceived investors by saying their funds would go into a lending pool for “flash loans.” These loans allow users to borrow money without collateral, as long as they repay it within the same blockchain transaction. However, the SEC revealed that the lending pool the brothers claimed to have didn't actually exist.

The brothers told investors their money would be sent to the crypto exchange Kraken, where U.S. dollars would convert into Tether's stablecoin, USDT. They assured investors that their USDT would quickly move into a crypto wallet and be used for high-frequency trading.

The SEC claims that out of the $61.5 million raised, at least $53.9 million was either misappropriated or used to pay interest, finder’s fees, and return principal to earlier investors. Additionally, the SEC alleges that the brothers funneled millions to support their lavish lifestyles.

Tanner Adam reportedly used investor funds for installment payments on a $30 million condo in Miami. Meanwhile, Jonathan Adam is accused of spending at least $480,000 on luxury vehicles, including cars and recreational vehicles.

According to the complaint, the Adam brothers continued to deplete their assets until June 2024, leaving less than $400,000 in their controlled bank accounts.

The SEC is now pursuing permanent injunctions, the return of profits, and civil penalties against the Adam brothers.