The US Securities and Exchange Commission (SEC) has taken legal action against 17 individuals allegedly involved in a Crypto Ponzi scheme that defrauded more than 40,000 victims and amassed $300 million.
As per the SEC’s press release, Houston-based CryptoFX LLC operated the scheme, primarily targeting Latino investors in the United States and two other countries. This most recent complaint follows the SEC’s emergency action in September 2022, which shut down the CryptoFX scheme and charged its leaders, Mauricio Chavez and Giorgio Benvenuto.
Crypto Ponzi Scheme Targets Latino Community
According to Gurbir Grewal, director of the SEC’s Division of Enforcement, CryptoFX operated as a massive Ponzi scheme, enticing Latino investors with promises of financial freedom and guaranteed returns through cryptocurrency and foreign exchange investments.
The SEC’s investigation revealed that the scheme relied primarily on funds from new investors to repay earlier investors, with only a fraction of the funds raised being used for actual trading activities. Grewal, director of the SEC’s Division of Enforcement, said:
In the end, the only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across ten states and two foreign countries. A scheme of that size requires lots of participants, and as today’s action demonstrates, we will pursue charges against not just the principal architects of these massive schemes, but all those who further their fraud by unlawfully soliciting victims.
The complaint alleges that the 17 individuals from Texas, California, Louisiana, Illinois, and Florida served as leaders within the CryptoFX network. They allegedly solicited investors by offering “unrealistic returns” ran
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Author: Ronaldo Marquez
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