Crypto Ponzi Scheme: SEC Accused 17 Individuals in $300M Alleged Scam

The United States Securities and Exchange Commission (SEC) has uncovered a sprawling cryptocurrency Ponzi scheme, resulting in charges against 17 individuals who collectively defrauded thousands of Latino investors in the country, amassing approximately $300 million.

Unveiling the Alleged Fraud: Operation CryptoFX

The SEC’s investigation revealed that CryptoFX LLC, headquartered in Houston, Texas, served as the front for the fraudulent activities orchestrated by the 17 charged individuals. Mauricio Chavez and Giorgio Benvenuto, the principal operators of CryptoFX, are accused of orchestrating the scheme, which targeted over 40,000 predominantly Latino investors in the U.S.

Operating under the guise of a legitimate platform for trading crypto assets and engaging in foreign exchange markets, CryptoFX and its leaders, scattered across Texas, California, Louisiana, Illinois, and Florida, lured investors with promises of extravagant returns ranging from 15% to 100%.

The Deceptive Facade: Misuse of Funds

Between May 2020 and October 2022, the perpetrators behind CryptoFX managed to accumulate $300 million by duping unsuspecting investors. Contrary to their claims of utilizing the funds for cryptocurrency and forex trading, the fraudsters diverted the money to sustain their own lavish lifestyles. Instead of generating profits, they utilized the funds to pay off earlier investors and line their pockets with commissions and bonuses.

Also Read: Indian EOW Exposed A $120 Million Cryptocurrency Ponzi Scam

SEC’s Pursuit of Justice and Restitution

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, condemned the fraudulent activities of CryptoFX, labelling it a “$300 million Ponzi scheme” that preyed on Latino investors with promises of guaranteed financial gains. The SEC, in its pursuit of justice, seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against the perpetrators.

Despite court orders to cease operations, certain defendants, such as Gabriel and Dulce Ochoa, continued soliciting investments from victims. Maria Saravia, another defendant, went as far as dismissing the SEC’s lawsuit as fraudulent when investors raised concerns.

Conclusion: Holding Perpetrators Accountable

As the investigation unfolds, the SEC remains resolute in holding not only the masterminds but also all those who participated in perpetuating the fraudulent scheme accountable. With thousands of victims spanning multiple states and countries, the SEC’s actions underscore its commitment to safeguarding investors and maintaining the integrity of the financial markets.