The U.S. Securities and Exchange Commission (SEC) has charged 17 individuals involved in the CryptoFX financial pyramid. The scheme resulted in $300 million in damages.
SEC’s Director of Enforcement, Gurbir Grewal, stated that the Texas-based company deceived 40,000 investors across ten U.S. states and two other countries.
“CryptoFX was a $300 million Ponzi scheme targeting Latino investors with promises of financial freedom and life-changing ‘risk-free’ crypto investments,” he said.
In October 2022, the SEC shut down CryptoFX. At that time, the agency reported that since 2020, the scheme had attracted over $12 million from 5,000 investors, promising returns of 15% to 100%.
The SEC noted that instead of trading digital assets, the organizers used most of the $300 million collected to pay commissions and bonuses to other investors, as well as to fund their own lifestyles. One of the accused purchased a house in Texas for $1 million.
The pyramid was organized by Mauricio Chavez and Giorgio Benvenuto. Two other unnamed defendants settled with the SEC without admitting or denying the charges.
In January 2024, the U.S. Securities and Exchange Commission charged the cryptocurrency project HyperFund with defrauding investors of $1.7 billion.
In March, Braiscompany founder Inacio Da Silva Neto and his wife Farias Campos were arrested in Argentina for running an alleged cryptocurrency Ponzi scheme, which caused $400 million in damages to investors from Brazil.