The US Securities and Exchange Commission (SEC) has charged 17 people with creating the CryptoFX cryptocurrency pyramid scheme, which raised over $300 million.
CryptoFX LLC was registered in the state of Texas and is mainly focused on Latin American users. The organizers managed to attract over 40,000 customers from the United States and two other countries. The total damage caused by fraudsters, according to US law enforcement agencies, exceeded $300 million.
"We believe CryptoFX was a Ponzi scheme aimed at Latin American investors that raised $300 million. The organizers lured investors with promises of financial freedom and life-changing wealth. To do this, clients were offered “risk-free” and "guaranteed" investments in cryptocurrencies. But, in the end, the only thing that CryptoFX guaranteed was to deceive thousands of victims from 10 US states and two other countries," said Gurbir Grewal, director of the SEC's Enforcement department.
CryptoFX promised investors a profit from investing in cryptocurrency trading in the amount of 15% to 100%. Most of the funds were used not for trading, but for paying interest to earlier investors and attracting new ones. Of course, the organizers lived on a grand scale and bought a house in Texas for $1 million.
Interestingly, at the end of 2022, the SEC declared CryptoFX a pyramid scheme and ordered the suspension of the company's activities, accusing Mauricio Chavez and Giorgio Benvenuto of organizing the scheme. However, this did not stop other participants of the scheme-Gabriel and Dulce Ochoa - continue raising funds.
CryptoFX LLC was registered in the state of Texas and is mainly focused on Latin American users. The organizers managed to attract over 40,000 customers from the United States and two other countries. The total damage caused by fraudsters, according to US law enforcement agencies, exceeded $300 million.
"We believe CryptoFX was a Ponzi scheme aimed at Latin American investors that raised $300 million. The organizers lured investors with promises of financial freedom and life-changing wealth. To do this, clients were offered “risk-free” and "guaranteed" investments in cryptocurrencies. But, in the end, the only thing that CryptoFX guaranteed was to deceive thousands of victims from 10 US states and two other countries," said Gurbir Grewal, director of the SEC's Enforcement department.
CryptoFX promised investors a profit from investing in cryptocurrency trading in the amount of 15% to 100%. Most of the funds were used not for trading, but for paying interest to earlier investors and attracting new ones. Of course, the organizers lived on a grand scale and bought a house in Texas for $1 million.
Interestingly, at the end of 2022, the SEC declared CryptoFX a pyramid scheme and ordered the suspension of the company's activities, accusing Mauricio Chavez and Giorgio Benvenuto of organizing the scheme. However, this did not stop other participants of the scheme-Gabriel and Dulce Ochoa - continue raising funds.
