SEC Charges 17 Individuals in 0 Million Crypto Ponzi Scheme

The United States Securities and Exchange Commission (SEC) has brought charges against 17 individuals involved in an alleged cryptocurrency Ponzi scheme operated under the guise of CryptoFX LLC. The scheme targeted predominantly Latino investors in the U.S., promising substantial returns through crypto and foreign exchange trading.

According to the SEC, CryptoFX posed as a trading platform for crypto assets and foreign exchange markets, with the charged individuals acting as leaders of the network. They solicited investments from over 40,000 investors, luring them with promises of guaranteed returns ranging from 15% to 100%.

However, instead of engaging in legitimate trading activities, the perpetrators allegedly used the funds raised to sustain their own lifestyles and pay returns to earlier investors, characteristic of a Ponzi scheme. The SEC’s Director of Enforcement, Gurbir S. Grewal, described CryptoFX as a “$300 million Ponzi scheme” that preyed on investors’ aspirations for financial freedom.

The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the defendants. While some have consented to judgments without admitting guilt, the SEC remains steadfast in its pursuit of justice against those involved in perpetrating such fraudulent schemes.

This case underscores the importance of regulatory oversight in protecting investors from financial scams and highlights the SEC’s commitment to holding accountable those who engage in unlawful activities within the cryptocurrency space.