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SEC Halts Crypto Ponzi Scheme, Victims Lose Funds

12 Mar

SEC Halts Crypto Ponzi Scheme, Victims Lose Funds

• Crypto Ponzi scheme led to the loss of funds for up to 30 Latino investors.
• Mauricio Chavez and Giorgio Benvenuto were running an unregistered crypto-asset offering.
• 90% of investor money was used to pay out other investors, develop real estate, and fund Chavez’s lifestyle.

Crypto Ponzi Scheme Claims Investor’s Funds

The Latin Times report shared that up to 30 victims of the operation have alerted authorities of their losses to the scammers. In detail, the people behind the scam are employees of CryptoFX LLC, a company currently involved in a federal case in Texas.

SEC Executes Emergency Action

When regulators got wind of the illegal dealings, the SEC executed an emergency action to stop the offering. Mauricio Chavez claimed to be well-versed in crypto trading and supposedly taught Latino residents how to make more money by trading digital assets such as Bitcoin and NFTs. However, when they come to his seminar he solicited them to invest in CryptoFX so that it can conduct digital asset and foreign exchange trading on their behalf with no experience or education about crypto assets or investments.

Ponzi Scheme Model

Chavez was never engaging in crypto trading but instead paying out investors with other people’s money based on a Ponzi scheme model. He used 90% of investor funds to pay out other investors, develop real estate under him and Benvenuto, and fund his wealthy lifestyle. On the other hand, Benvenuto pulled in many investors to the scheme using some of their money personally as well as for unspecified business purposes.

City Hall Warning Issued

A City Hall warning has been issued disclosing that up to 30 residents had fallen victim to this fraud operation, cautioning others against such schemes by urging them not wait any longer but take preventive measures like learning more about potential investing opportunities before investing their hard earned cash into them.

SEC Charges Against Defendants

The SEC has charged both defendants with fraudulent activities related securities offerings violations as well as misappropriation of investor funds while they promised returns on investment which never came true leading dozens into financial ruin along with potentially facing criminal charges due their actions .