17 individuals charged by SEC in $300 million cryptocurrency Ponzi scheme
The U.S. Securities and Exchange Commission (SEC) has taken legal action against 17 individuals who are allegedly involved in a $300 million Ponzi scheme that primarily targeted Latino investors. The scheme, known as CryptoFX LLC, operated out of Houston, Texas, and attracted more than 40,000 investors from 10 states in the U.S. and two foreign countries.
According to a press release issued on March 14, the scheme promised investors substantial profits through “risk-free” and “guaranteed” investments in cryptocurrencies and foreign exchange. The SEC’s investigation revealed that the funds invested were not used for trading purposes but instead used to pay commissions and bonuses to the individuals involved, as well as to fund their own extravagant lifestyles.
This recent action by the SEC is a continuation of its previous intervention in September 2022, which resulted in the suspension of CryptoFX’s operations and the implication of its key figures, Mauricio Chavez and Giorgio Benvenuto.
The SEC has brought various charges against the 17 individuals involved, including fraud, failure to register securities, failure to register as brokers, and failure to protect whistleblowers. Two of the defendants, Luis Serrano and Julio Taffinder, have agreed to pay penalties, disgorgement, and interest totaling over $68,000 without admitting or denying guilt.
This case highlights the importance of regulatory oversight in the cryptocurrency industry, as well as the need for investors to exercise caution and conduct thorough due diligence before investing in any scheme.
