As soon as it was brought to the attention of the SEC, a Crypto Ponzi Scheme that specifically targeted members of the Latino community in the United States was immediately shut down. According to an SEC filing published on Monday, Houston natives Mauricio Chavez and Giorgio Benvenuto, who ran the Texas-based firm CryptoFX, “used the attraction and novelty of crypto assets to solicit money from unsophisticated investors,” promising them massive returns on their money.
Chavez has been charging students for lessons “ostensibly for the purpose of educating and empowering the Latino community to build wealth through crypto asset trading,” despite the fact that he has no expertise, experience, or training in investments or crypto.
Crypto Ponzi Scheme CryptoFX Frauded Investors Over $12 Million
According to the complaint filed in the United States District Court for the Southern District of Texas, “these seminars, which have been held since 2020, were merely conduits for soliciting investors to give their money to CryptoFX.” The company also allegedly used a referral system to recruit new investors.
It is also claimed that Chavez gave investors fake documents in which he made false promises, including that they would incur no losses due to his extensive background in cryptocurrency.
According to the SEC, CryptoFX successfully collected over $12 million from over 5,000 investors.
However, Chavez spent more than 90% of the money on his extravagant lifestyle, including cars, jewelry, adult entertainment, a house bought in his wife’s name, and the purchase and development of real estate that he and Benvenuto controlled, instead of using it to make profits from crypto trading as he had promised.
Meanwhile, Benvenuto is accused of luring a wealthy investor into the scheme and then using the money for personal gain and the benefit of CBT Group, LLC, a business he and Chavez co-owned.
The SEC claims that the co-founders of CryptoFX stole nearly $8 million from investors while paying approximately $2.7 million in fake returns to some of them. The SEC is seeking “permanent injunctive relief, civil penalties, and the return of ill-gotten gains with interest,” as well as a prohibition on Chavez and Benvenuto serving as officers or directors of any public company, in its complaint against the defendants for alleged violations of federal securities laws.
Florida man pleads guilty in federal court last month to his role in a $100 million cryptocurrency Ponzi scheme. Nearly two years ago, Joshua David Nicholas of Stuart, Florida, posed as the “head trader” of EmpiresX, a cryptocurrency investment platform that promised daily returns of one percent via a trading bot that did not exist.
