SEC Charges 17 Individuals in $300 Million Ponzi Scheme Disguised as Crypto Trading Platform CryptoFX
The US Securities and Exchange Commission (SEC) has taken legal action against 17 individuals involved in an alleged $300 million Ponzi scheme operating under the name CryptoFX, a cryptocurrency trading platform.
The SEC’s charges shed light on a fraudulent operation that targeted Latino investors, promising them financial prosperity and guaranteed returns through crypto and foreign exchange investments.
CryptoFX was officially registered as a crypto trading platform in Houston in February 2020.
However, suspicions surrounding its activities led the SEC to file an emergency action in September 2022, seeking to halt the platform’s operations.
Nearly 18 months later, on March 14, the SEC identified and charged 17 individuals believed to be the masterminds behind the Ponzi scheme.
According to Gurbir S. Grewal, director of the SEC’s Division of Enforcement, CryptoFX exploited Latino investors, offering them the illusion of risk-free investments in cryptocurrencies and non-fungible tokens (NFTs) that would purportedly lead to life-changing wealth.
The scheme specifically targeted crypto investors within the Latino community across multiple U.S. states and two foreign countries.
The SEC’s investigation revealed that the individuals associated with CryptoFX misused investors’ funds, diverting them for personal gain instead of making legitimate investments in cryptocurrencies and NFTs.
The allure of the booming crypto market during the time further enticed investors to participate in the scheme.
In response, the SEC has filed charges against the principal architects and perpetrators of the Ponzi scheme, alleging violations of various sections of the Securities and Exchange Act.
The regulatory body is seeking
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