SEC charges 17 people in $300 million crypto Ponzi scheme targeting Latino investors

The Securities and Exchange Commission charged 17 people for their roles in an alleged $300 million crypto-related Ponzi scheme that targeted tens of thousands of predominantly Latino investors.

The scheme involved Texas-based CryptoFX LLC and affected 40,000 investors in ten U.S. states and two other countries, the SEC said on Thursday in a statement. 

“We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-altering wealth from ‘risk free’ and ‘guaranteed’ crypto and foreign exchange investments,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement in a statement. “In the end, the only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across 10 states and two foreign countries." 

The scheme involved salespeople soliciting investors and telling them that Crypto FX's crypto and foreign exchange trading would bring in 15% to 100% returns. The SEC said that most of the $300 million raised was not used for trading but instead for other investors to pay commissions and bonuses to themselves and fund their lifestyles.

According to the complaint, one of the defendants used the funds to pay for a $1 million house in Texas. 

The defendants also "engaged in unregistered offers and sales of CryptoFX investments and acted as unregistered brokers," according to the complaint filed in the U.S. District Court for the Southern District of Texas in the Houston division. 

Past actions

The regulator previously filed an emergency action in late 2022 to halt the scheme and charged its two main principals, Mauricio Chavez and Giorgio Benvenuto. After filing the action, the SEC continued its investigation to find others involved in the scheme, said Eric Werner, director of the SEC's Fort Worth regional office. 

Two defendants, spouses Gabriel and Dulce Ochoa, continued to solicit investors after the court issued orders to halt the scheme. Gabriel Ocha went so far as to instruct two investors to take back their complaint to the SEC and another defendant Maria Saravia allegedly told investors that the SEC's lawsuit was fake, according to the regulator's statement. 

According to the statement, two of the 17 defendants settled without admitting or denying the SEC's allegations.