SEC ACCUSES 17 IN $300M CRYPTO SCHEME 

The US Securities and Exchange Commission (SEC) has filed charges against 17 individuals linked to a $300 million cryptocurrency Ponzi scheme, primarily defrauding Latino investors in the United States.

This scheme was orchestrated through a Houston, Texas-based entity known as CryptoFX LLC, as detailed in a statement from the regulatory body.

SEC’s Allegations of Cryptocurrency Fraud

Mauricio Chavez and Giorgio Benvenuto, identified as CryptoFX’s leading figures, are accused by the SEC of exploiting over 40,000 mainly Latino investors across the U.S. as part of this Ponzi scheme.

From May 2020 until October 2022, CryptoFX misrepresented itself as a trading hub for cryptocurrency and foreign exchange, with the 17 accused playing pivotal roles within the organization. These leaders, hailing from states such as Texas, California, Louisiana, Illinois, and Florida, lured investors with the promise of returns ranging from 15% to 100%.

Rather than engaging in legitimate trading activities as claimed, the accused allegedly funneled the $300 million collected into personal expenses, using new investments to pay off previous investors under the guise of returns, and awarded themselves hefty commissions and bonuses.

Gurbir S. Grewal, the SEC’s Enforcement Division Director, commented on the case, stating: “According to our allegations, CryptoFX was a deceitful $300 million Ponzi scheme that lured Latino investors with the false promise of financial liberation and significant wealth from supposedly risk-free and assured investments in crypto and foreign exchange markets.”

Call for Legal Repercussions and Penalties

Additionally, two of the defendants, Gabriel and Dulce Ochoa, a married couple, continued to attract investment even after a legal injunction against CryptoFX in September 2022. Gabriel Ochoa notably advised disgruntled investors to seek redress from the SEC, while another defendant, Maria Saravia, dismissed the SEC’s legal actions as fictitious to quell investor concerns.

While certain defendants have agreed to settle without admitting guilt or contesting the SEC’s claims, the commission is pursuing permanent injunctions, orders for disgorgement plus interest before judgment, and civil fines against the remaining individuals.

Grewal further emphasized, “What CryptoFX truly ensured was the creation of an extensive victim network spanning ten states and two international locations. A fraud of this magnitude necessitates widespread involvement, and as indicated by our current actions, we are committed to prosecuting not only the masterminds behind these vast conspiracies but also those who perpetuate these frauds by illegally soliciting victims.”

Read more from the blog

News

3 May 2023

StoneBlock CEO: Nervous investors will be eliminated from the market

News

22 Apr 2024

ANIMOCA BRANDS HOLDS $558M IN CRYPTO ON BALANCE SHEET 

News

22 Apr 2024

CRYPTOJACKER ACCUSED OF $3.5M FRAUD AGAINST TWO CLOUD PROVIDERS