📰 Table Of Contents
SEC Takes Legal Action Against CryptoFX Ponzi Scheme
The US Securities and Exchange Commission (SEC) has recently taken legal action against 17 individuals involved in an alleged $300 million Ponzi scheme operating under the name CryptoFX, a cryptocurrency trading platform.
Fraudulent Operation Targeting Latino Investors
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.
CryptoFX Exploited Latino Investors
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.
SEC Files Multiple Charges Against Crypto Platforms
Over the past year, the SEC has filed numerous lawsuits against crypto firms, with SEC Chair Gary Gensler consistently asserting that most cryptocurrencies should be classified as securities.
For one, the agency initiated a civil case against Sam Bankman-Fried, co-founder of FTX. In addition to the case against Bankman-Fried, the SEC filed lawsuits against other major crypto players, including Binance, its CEO Changpeng Zhao, and Coinbase.
More recently, a federal judge ruled that the SEC’s lawsuit against crypto firms Gemini and Genesis will proceed in court. The judge’s decision comes after Gemini and Genesis attempted to have the lawsuit, which alleges the sale of unregistered securities through the Gemini Earn program, dismissed.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
