SEC shuts down CryptoFX crypto pyramid in Texas that raised $12 million

The U.S. Securities and Exchange Commission (SEC) shut down the Texas-based CryptoFX crypto pyramid, which since 2020 raised $12 million under the guise of cryptocurrency investments.

According to the agency, the scheme’s organizers Mauricio Chavez and Giorgio Benvenuto promoted training seminars, promising high returns from crypto trading. They primarily targeted Latin American investors.

The co-founders of CryptoFX allegedly backed their credentials with forged documents certifying the necessary education and experience in cryptocurrency investments.

A referral system was used to recruit new participants.

The SEC said that CryptoFX attracted more than $12 million from over 5,000 investors.

About $2.7 million of this amount was paid out to investors as fictitious profits. Nearly $8 million was spent on cars, entertainment, jewelry and various real estate.

According to a complaint filed in the Southern District of Texas, the founders of CryptoFX are charged with violations of federal securities laws. In addition, Benvenuto is charged with soliciting a large investor, whose funds he redirected to accounts of the CBT Group, LLC, the company he co-owned with Chavez.

The SEC seeks disgorgement of ill-gotten gains with interest, and also bars the defendants from holding positions in any public company.

Earlier in September, U.S. resident Joshua Nicolas admitted involvement in the EmpiresX cryptocurrency pyramid for $100 million.

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