Fast cars, forgery and a bogus Banksy deal: Australians caught in collapse lose millions

Brad Kamieniarz was ready for adventure when he flew to Costa Rica to meet online trading guru Guillermo Gharib.

The all-expenses paid trip in October featured five-star villas, boat parties, cocktails and the forming of new friendships on white-sand beaches.

Kamieniarz was there for a good time, but also had questions. The online trading scheme he had poured half-a-million dollars into, TradeAI, had stopped paying out and he, along with other investors on the trip, wanted to know why.

During one round of cocktails, Kamieniarz says he was told money had been stolen from the accounts and action would be taken.

It turned out Kamieniarz was caught up in a collapse which one recovery analyst estimates has cost investors up to $US400 million ($600 million) and heavily features Australians among those counting their losses.

Kamieniarz’s face is ashen and eyes glassy when this masthead visits his home. He juggles meetings with the Tax Office and police while trying to keep his disability support business afloat.

He invested a total of $614,665 and now faces having to sell his Mooroolbark home, in Melbourne’s east, or declare bankruptcy.

“It’s a life-destroying amount of money,” he said.

Kamieniarz is not alone. This masthead obtained access to thousands of messages in private social media channels that reveal the scheme’s unravelling over 10 months.

The channels, on social media platform Discord, show the hype and hope of the initial pitch followed by confusion and recriminations as investors increasingly feared they would never see their money again and those in charge publicly turned on each other.

TradeAI’s elaborate mosaic involves fast cars, claims of fraudulent documents and passing associations with global celebrities. It is a cautionary tale and telling reminder of this world’s gaping regulatory holes.

The key players garnered investor trust by using their real names and offering visits to their Costa Rican offices. This is unusual in the new online world known as Web3, where identities are concealed and funds pass through anonymous accounts.

“These are real people. They invite you into their homes, introduce you to their families,” said Kamieniarz. “It was next-level in your face.”

However, that trust has now dissolved among claims and counter-claims of deception and broken promises on all sides.

Gharib, who remains in Costa Rica, maintains money will be repaid at the same time as conceding investors are still owed $US80 million.

James Biniaz and Eric Bennett*, who were brought in as the crisis management team, and then raised fresh money from investors, also admit to problems getting investors their cash.

This masthead is not suggesting any of those involved have misused the company’s funds, only that investors have not received payments they were told they could expect and that the company has made apparently misleading statements in the fallout.

Bennett claims to be severely out of pocket himself as the pair accuse Gharib of misleading investors.

”I’m not going to be answering any questions, but I don’t want people to think I’m shying away,” Biniaz told furious investors on April 11 this year. “There’s going to be a full audit.”

Biniaz did not respond to detailed questions from this masthead. He last made Australian headlines in 2020 when his attempted takeover of the Perth Glory A-League team was derailed after his criminal record became public.

He was part of the team that organised the Costa Rica trips, inviting another Australian to visit in January after investors posted Biniaz’s prior convictions for tax fraud and assault on Discord.

“There’s a rich criminal history behind this team,” wrote an Australian, using the username Brock.

Millions of people around the world use messaging services like Discord to trade cryptocurrencies, NFTs and countless other financial products.

It’s the financial world’s Wild West – anonymous by design and ripe for the targeting of hyped-up day-traders. Insiders post to Discord using their own slang, punctuated with memes, GIFs and emojis.

Those alert to the inherent risks were reassured when TradeAI’s strategies were endorsed by high-profile players with thousands of online followers.

This was further bolstered when the founders “doxxed themselves” – crypto-speak for using their real identities and holding in-person meetings.

TradeAI promised outsized returns by combining artificial intelligence technology with the skills of Gharib, also known as “G”. Gharib was pitched as a successful start-up founder who headlined global crypto events.

Australian investor Freddy watched and waited for three weeks as Discord channels lit up with stories of Gharib’s stellar returns before putting in his own money.

“Those returns are silly,” said the Brisbane-based hospitality worker, noting that was not uncommon in the crypto space. “You see people put in $100, and it turns into $1.5 million two weeks later. These things do happen.”

Initially, promises were kept to investors. Substantial, cold, hard cash was transferred into real-life bank accounts.

“We are loving the spirit all you legends are bringing into the discord!” one TradeAI staffer posted on July 6 last year.

A sense of urgency was created by capping participation in investment rounds, and giving exclusive access to new products.

Now many investors believe there are serious questions about some of the company’s claims.

These concerns are echoed by several major businesses that TradeAI, and its successor companies, named as partners – Binance, OKX and Veriff – which denied any involvement when approached by this masthead.

A spokesperson for crypto exchange OKX responded to questions saying it had reported the group to Australian authorities.

“It appears to be a scheme by bad actors who used the names of several well-known platforms, including ours, in an attempt to scam crypto users by spreading false information,” the spokesperson said.

For many investors, the first red flag was delayed payments as deposits would be a few days late, then weeks, then not made at all.

Investors were told online bugs were responsible and Gharib was pulling “24-hour shifts” to resolve the problems. “Let’s give the man some rest,” one post stated.

Then the message became that Binance, the world’s biggest crypto exchange, had frozen funds after flagging accounts as high-risk.

Reluctantly, investors sent passports, bank statements and other private information after they were told the documents were needed to “unstick” the money.

“They kept waving that carrot,” said one Australian investor who did not want to be identified, to discuss personal financial circumstances. “We kept thinking: if we do this, we’ll get our money back.”

In reality, a Binance spokesperson told this masthead, there was no partnership.

“Binance is not a partner to the alleged project and has no relation with it,” they told this masthead. “It appears these investors may have been targeted by a scam.”

Gharib told this masthead that TradeAI, and its successor Stakx, had never claimed any relationship with Binance. He did not respond when shown documents where representatives from his company claimed to have meetings with Binance executives.

Gharib also failed to attend two scheduled meetings with this masthead where he pledged to provide evidence and lawyers to support his claims.

Chief counsel at global identity verification company Veriff, Ulla Helm, also told this masthead the company had contacted Stakx “demanding explanations” after receiving messages from investors in April.

“Stakx has not been responding in substance to our correspondence and their company emails are bouncing back,” Helm said. Questioning investors were booted from chat groups or criticised for “fudding” – crypto-speak for spreading negativity.

Freddy, who did not want to use his surname out of fear for his safety, was among the first pushing back, and says he was attacked by the “belligerent” crowd and “muted” by moderators for asking simple questions.

“I was being very annoying. I’m not rich like the others — $2500 was a lot of money for me,” he said. “I was one against 1000. There was this superpower of getting people rallied up, pumped up.”

Still, the scheme’s backers asked for patience.

“We want to reassure you that YOUR funds are safe,” one post from September 11 claimed. “Please hang in there, we have seen a good flow of money being pushed over the last week.”

By October, the online community had more than 2000 members around the world. Small repayments were made, keeping some investors at bay.

The window for recouping earnings would appear at strange hours. Traders became hooked to their phones, 24 hours a day, waiting for the “claim” button to appear.

Then, payments ceased. Investors were furious and the questions restarted.

TradeAI responded by producing a document by a Costa Rican law firm that “certified” two Binance accounts held $US143 million ($217.5 million) combined.

When this masthead provided Binance the document and asked further questions, it responded: “Binance has investigated further and confirms there is no connection or involvement.”

Gharib said the lawyer’s letter was not an official document and was leaked.

The lawyer who signed the form did not answer the mobile phone number listed on the letter, the firm’s website has been removed and another listed phone number is disconnected.

TradeAI maintained it had an open-door policy and invited investors to Costa Rica.

Soon after Kamieniarz returned to Australia, TradeAI’s message changed. It announced plans to enlist a “crisis management team” consisting of “independent experts with expertise in guiding organisations through challenging times”.

“We have always prided ourselves on transparency, trust and accountability. In recent times, there have been serious accusations and questions raised about our platform and its leadership,” said a notice posted to Discord.

Enter Jim Biniaz and Eric Bennett, who were pitched as the community’s saviours. “We are leaving no stone unturned in the quest for clarity,” the community was told.

In late October, an initial review was published detailing an “extraordinary spectrum of events” including “operational failings, data breaches, extortion, embezzlement, as well as theft”.

“Rest assured, each one of these issues is being meticulously reviewed and documented.”

The team said they had found “reasons for optimism” and unveiled plans to merge companies to create Stakx to takeover TradeAI’s business.

Bennett moved to Costa Rica to work alongside Gharib, who was described as “one of the brightest traders in the space”.

Past troubles were blamed on “rapid scale” and a search was under way for “C-suite positions” to ensure “robust governance”, settle outstanding payments and position the company for growth.

On November 7, a message was posted to Discord announcing entrepreneur Sam Jones as interim CEO. Jones last made Australian media headlines drumming up support for his online sporting app Ballr.

Investors were shown Jones’ glittering resume: 10 years in Sydney, Wish.com managing director, and critically, leadership of Shiller, an online gaming company co-founded with US rap legend Snoop Dogg.

In an interview, Jones denied ever taking the interim CEO position or approving the public message. He says Biniaz invited him to leverage Gharib’s “cult-like” community to launch a new online product.

He spent two months in Costa Rica but said he quickly felt something was not right. Many of Gharib’s followers were owed money and staff were unpaid, he said.

“It was very clear in my first 48 hours that this was a heavily charged environment,” he said. “In hindsight, I do think they tried to use my name.”

Jones said he never raised any money from Gharib’s community, and denies any responsibility for the “huge amounts of money” TradeAI and Stakx owed to “huge amounts of people”.

“I massively regret that I ever even went to Costa Rica,” he said. “It’s tragic. But it does have the hallmarks of a Ponzi scheme.”

Bennett also denies wrongdoing. “I believe all funds were taken from clients before we came. We came to rescue it and believed we were doing a real good job until the bombshell from Guillermo,” he said in WhatsApp messages.

When asked to explain the “bombshell”, he threatened legal action. Bennett said his role was to deal with death threats towards Gharib, and instead he became the target of “vile creatures”.

He says he has now made reports to law enforcement. “Forgive me for being the victim here. We actually are.”

Still, the new-look team brought some confidence about Gharib and the future.

Under the partnership, investors were told they could turn a bad experience into a fresh opportunity and were offered access to a range of new digital products under new brands.

Any future investments would be “asset-backed” and investors were shown photographs of fast cars and documents that claimed to certify the purchase Banksy artworks worth $US9 million.

While the London gallery that produced the appraisal claimed the artworks were legitimate, the seller said the pictured contract was “null and void” because “no funds were forthcoming at the time of issuance”.

Biniaz filmed himself in an empty office space he described as an “accelerator” while drumming up interest in a new venture he promised would deliver profits to the community.

“Myself and G are in Dubai,” he says. “This is the office, my friend. This is where the magic happens.”

When contacted by a sceptical investor, the real estate agent for the space, Sycamore Real Estate, said on social media the floor was empty and Biniaz was only inspecting. Sycamore was contacted for comment.

Despite the excitement about some apparent progress, multiple plans to pay “backlogs” were announced but not fulfilled.

By December 2023, the community was becoming an angry mob.

Stakx launched a “repayments portal” where investors could sign contracts, including a non-disparagement clause, that would deliver debts paid in 90 to 120 days.

Biniaz wrote a letter to Gharib on December 4 stating he was “happy to confirm” he would make $100 million available “to satisfy your obligations”. The document was stamped by Dubai investment firm Cypher Capital.

The 120 days passed and many people were still owed money. Gharib told this masthead that 60 per cent were paid and stressed the remainder would receive their money. “The word Ponzi is not appropriate,” Gharib said.

By April, Cypher Capital publicly denied any association with Stakx which it described as a “scam”.

The “crisis team” of Biniaz and Bennett was now throwing its former guru under the bus.

Biniaz posted on X that Guillermo would “be being passed onto the authorities here imminently”. “All evidence will be supplied to them. I will personally share everything with the community. The man is a virus. The game is over.”

In private text messages, seen by this masthead, Gharib forcefully denied wrongdoing. “I haven’t stolen a f---ing dollar.”

About the time the payment deadline approached in late March, investors were told Bennett had suffered a heart attack. His wife uploaded a video to Discord of him hooked up to a nebuliser.

“Are you OK, honey?” she asked, to which he replied, “No”.

Discord lit up with memes accusing Bennett of faking the health episode.

On April 12, Stakx published an “important announcement” with bad news for those still waiting for payment.

“We received communications from Binance that there are no funds in the Binance accounts. Legal pursuit of the responsible parties will intensify starting Monday.”

The very same post promoted yet another product.

“I am not going anywhere,” Bennett wrote. The post was met with a mix of middle finger, yawn, devil and poo emojis.

By this point, investors were openly ventilating concerns. They created an intelligence file detailing Biniaz’s criminal history and reports about Bennett’s alleged connections to money launderers and drug trafficking.

“What do we do as a community now? Trust the same people who have been lying to the community?” wrote one victim.

“I also understand many victims are from countries whose authorities may not take this type of fraud on. Where do these victims go?”

This masthead has interviewed several devastated Australian investors.

Many do not want to be identified because they fear the possible criminal connections of the people involved or because they are embarrassed by getting caught up in the scheme.

They describe anguish after losing their life savings or plunging their families into debt.

“The scam on top of the scam is horrible. It’s when people are at their lowest.”

JP, investigator

A mother of two said she had invested because she was stuck in rental accommodation in regional NSW and wanted to use the earnings to buy her young family a home.

“It’s terrible being at the mercy of the landlord, not knowing when the lease is going to end,” she said. “I saw it as my opportunity to help change our lives.”

Freddy said he was raising money to pay for stem cell therapy for his wife’s multiple sclerosis. “Now that money is all gone,” he said.

Melbourne resident Paul has not slept properly for months after losing $US44,000 ($66,900). “I’m 63 years old, one of the oldest in this space. It’s affecting my future retirement.”

Perth-based Wah Sun lodged a report with WA Police but was told “police are unable to assist” because there was little chance of pursuing the scheme’s overseas promoters.

The police noted that in Australia, cryptocurrency “was not treated as ‘money’ or a ‘financial product’ and you have less protection”.

After being turned away from the police, some are turning to private companies promising to recoup the funds.

JP, from blockchain research and forensics firm Intelligence On Chain, is one private operator investigating the collapse. He estimates losses in the hundreds of millions of dollars.

JP, who doesn’t disclose his identity over security concerns, said this collapse was the largest he had seen of its kind. JP does not charge for his services, but could potentially get commissions if a law firm took on the case.

Most victims are from the United States, where JP says the total value of losses has already exceeded the threshold for FBI involvement. He said American authorities were more proactive about pursuing crimes against its citizens than Australia.

“I’ve not had too much luck with the Australian authorities,” he said.

*This name was changed for legal reasons.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.