SEC Charges 17 Individuals for $300 Million Crypto Ponzi Scheme
The United States Securities and Exchange Commission (SEC) has filed charges against 17 individuals for their involvement in a cryptocurrency Ponzi scheme that defrauded thousands of Latino investors in the country. The alleged fraudsters operated under a company called CryptoFX LLC, based in Houston, Texas.
Main Operators Targeted Latino Investors
Mauricio Chavez and Giorgio Benvenuto, the main operators of CryptoFX, are accused of targeting over 40,000 predominantly Latino investors in the U.S. through the Ponzi scheme. The scheme took place from May 2020 to October 2022, with CryptoFX posing as a platform for trading crypto assets and foreign exchange markets.
- The 17 charged individuals acted as leaders of the network.
- They solicited investments from victims with promises of high returns ranging from 15% to 100%.
- The leaders were located in Texas, California, Louisiana, Illinois, and Florida.
Instead of actually trading cryptocurrencies and foreign exchange as claimed, the alleged fraudsters used the funds raised to pay returns to other investors and themselves commissions and bonuses.
SEC Seeks Legal Actions
The SEC is seeking legal actions against the defendants involved in the CryptoFX Ponzi scheme. Two defendants, Gabriel and Dulce Ochoa, continued soliciting investments from victims even after a court ordered the halt of CryptoFX in September 2022. Gabriel even advised two investors to complain to the SEC to recover their investments. Another defendant, Maria Saravia, dismissed the SEC’s lawsuit as fake when investors expressed concerns.
- Some defendants have agreed to final judgments without admitting or denying the allegations.
- The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against the remaining defendants.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the importance of holding all participants accountable for their roles in massive schemes like CryptoFX. The SEC aims to pursue charges against not only the main architects but also those who unlawfully solicit victims.
Hot Take: Protect Yourself from Ponzi Schemes
The recent SEC charges against the 17 individuals involved in the CryptoFX Ponzi scheme serve as a reminder to be cautious when investing in the crypto market. Here are some key takeaways to protect yourself from Ponzi schemes:
- Do thorough research on any investment opportunity before committing your funds.
- Be skeptical of promises of high returns or guaranteed profits.
- Avoid investments that rely heavily on recruitment or require you to bring in new investors.
- Check if the company and individuals involved are registered with relevant regulatory authorities.
- Seek advice from financial professionals or experts before making investment decisions.
By staying informed and cautious, you can minimize the risk of falling victim to fraudulent schemes and protect your hard-earned money in the crypto market.
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