SEC Accuses 17 Individuals in $300 Million Cryptocurrency Ponzi Scheme

The SEC, the United States’ primary regulatory body for enforcements involving securities, announced charges against 17 individuals tied to a fraudulent cryptocurrency operation. These individuals are accused of implementing a Ponzi scheme and swindling a large number of Latino investors out of approximately $300 million.

Details provided in an official statement issued by the SEC reveal that the purported deceptive enterprise, CryptoFX LLC, was headquartered in Houston, Texas.

SEC’s Legal Action Against Crypto Con Artists

The formal allegations by the SEC target Mauricio Chavez and Giorgio Benvenuto, who are said to have closely directed CryptoFX’s operations, preying on over 40,000 Latino individuals across the U.S. by perpetuating fraudulent investment schemes.

The period from May 2020 until October 2022 saw CryptoFX presenting itself as a legitimate service offering cryptocurrency and foreign exchange investments, with the 17 accused serving as key figures within the network’s hierarchy. Operating across multiple states such as Texas, California, Louisiana, Illinois, and Florida, these individuals lured investors by promising unusually high profits ranging from 15% to 100%.

However, contrary to conducting authentic crypto and Forex trading, allegations suggest that the group improperly utilized the $300 million raised to maintain their personal lives, distributing so-called profits to earlier investors and allocating sizeable sums to themselves in the form of commissions and bonuses.

“This case outlines charges against CryptoFX for perpetrating a Ponzi scheme to the tune of $300 million, preying on Latino communities with the lure of risk-free and guaranteed returns from crypto and foreign exchange markets,” Gurbir S. Grewal, the SEC Enforcement Division Director, remarked.

SEC’s Demands for Asset Recovery and Penalties

Despite a court injunction to suspend CryptoFX’s operations in September 2022, two individuals associated with the case, Gabriel and Dulce Ochoa, continued to entice investors. In an unusual move, Gabriel Ochoa even encouraged dissatisfied investors to seek relief through the SEC. Simultaneously, another accused party, Maria Saravia, dismissed worries by deceiving investors into believing the SEC’s legal proceedings were not genuine.

Although some of the accused have agreed to judgments being passed without acknowledging or refuting the SEC’s allegations, the regulatory agency continues to pursue others, seeking irrevocable bans, financial restitution including preliminary interest, and monetary penalties for their wrongdoing.

“Ultimately, the only certainty provided by CryptoFX was their creation of a vast network of victims that spanned across numerous states and even breached international borders into two countries. A scam of such magnitude demands a widespread network of participants. As demonstrated by our current actions, we are dedicated to bringing charges against not only those central to these grand deceptions but also anyone involved in unlawfully soliciting unsuspecting victims,” Grewal elucidated further.”