US fraudsters exposed for creating a cryptocurrency pyramid scheme worth hundreds of millions of dollars

The U.S. Securities and Exchange Commission (SEC) has charged 17 people with creating the CryptoFX cryptocurrency pyramid scheme that raised more than $ 300 million.

CryptoFX LLC was registered in the state of Texas and mainly targeted Latin American users. The organizers managed to attract more than 40,000 customers from the United States and two other countries. The total losses from the fraudsters' actions, according to US law enforcement agencies, exceeded $ 300 million.

«We believe that CryptoFX was a Ponzi scheme targeting Latin American investors that earned $ 300 million. The organizers attracted investors with promises of financial freedom and life-changing wealth. For this purpose, clients were offered „risk-free“ and „guaranteed“ investments in cryptocurrencies. But, in the end, the only thing CryptoFX guaranteed was the defrauding of thousands of victims from 10 US states and two other countries,» said Gurbir Grewal, Director of the SEC’s Division of Enforcement.

CryptoFX promised investors a return on investment in cryptocurrency trading of 15% to 100%. Most of the funds were used not for trading, but to pay interest to earlier investors and attract new ones. The organizers of the scheme bought a house in Texas for $ 1 million.

At the end of 2022, the SEC declared CryptoFX a pyramid scheme and ordered the company to suspend its operations, accusing Mauricio Chavez and Giorgio Benvenuto of organizing the scheme. However, this did not prevent other participants in the scheme, Gabriel and Dulce Ochoa, from continuing to raise funds.

As a reminder, in January, fraudsters from Ukraine were exposed for creating a cryptocurrency pyramid scheme worth tens of millions of hryvnias. According to the National Police of Ukraine, under the guise of the S-Group international investment fund, the fraudsters offered users passive income by investing in cryptocurrencies.