US authorities have charged seventeen people for their alleged involvement in a multi-million dollar crypto Ponzi scheme.
In a new press release, the US Securities and Exchange Commission (SEC) says it is charging 17 people with operating a crypto scheme that targeted 40,000 investors in three countries.
According to the regulator, Texas-based company CryptoFX allegedly mishandled $300 million in deposited customer funds under the direction of the indicted individuals who promised investors that the company would generate profits of 15% to 100% from crypto and currency trading.
But instead of using the money to trade, the SEC says the individuals used the money to give themselves bonuses, pay off other clients’ returns, hand out commissions to investors and fund lavish lifestyles.
Additionally, the SEC’s complaint alleges that two of the defendants – Gabriel and Dulce Ochoa – continued to solicit investments even after being ordered to cease and desist in September 2022. The regulator says Gabriel instructed two victims to withdraw their complaints from the SEC if they wanted to. get their money back.
Says Gurbir S. Grewal, Director of the SEC’s Division of Enforcement:
“We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-changing wealth from ‘risk-free’ and ‘guaranteed’ crypto and currency investments.
In the end, the only thing CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across ten states and two foreign countries.
A scheme of that magnitude requires many participants, and as today’s action demonstrates, we will not only bring charges against the main architects of these massive schemes, but also against all those who further their fraud by unlawfully recruiting victims .”
According to the press release, the SEC is seeking permanent injunctions, disgorgement with prejudgment interest and civil penalties against each defendant.
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