SEC Charges 17 Individuals in $300 Million Crypto Ponzi Scheme
SEC has brought charges against 17 individuals for their involvement in an alleged $300 million cryptocurrency Ponzi scheme that primarily targeted Latino investors.
The scheme, operated by Texas-based CryptoFX LLC, impacted approximately 40,000 investors across ten U.S. states and two other countries, according to the SEC’s Thursday statement.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated, “We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-altering wealth from ‘risk-free’ and ‘guaranteed’ crypto and foreign exchange investments. In the end, the only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across 10 states and two foreign countries.”
The scheme operated through salespeople who enticed investors with promises of significant returns ranging from 15% to 100%. However, the SEC revealed that most of the $300 million raised was not used for trading but instead for commissions, bonuses, and personal expenses of the operators.
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One defendant allegedly used the funds to purchase a $1 million house in Texas. Additionally, the defendants were accused of engaging in unregistered offers and sales of CryptoFX investments and acting as unregistered brokers.
The SEC took emergency action in late 2022 to halt the scheme and charged its main principals, Mauricio Chavez and Giorgio Benvenuto. Subsequently, the investigation continued, leading to charges against additional defendants, including Gabriel and Dulce Ochoa, who continued soliciting investors despite court orders to cease.
Two of the 17 defendants settled with the SEC without admitting or denying the allegations.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
