The United States Securities and Exchange Commission (SEC) has uncovered a massive pyramid scheme orchestrated through the CriptoFX firm, targeting the Latino community in the US. The scheme, which raised over $300 million, promised high returns with cryptocurrencies but was actually a fraudulent operation designed to line the pockets of the perpetrators.
The mastermind behind the plot, Mauricio Chávez, presented himself as a cryptocurrency expert and convinced over 40,000 people to invest their money with promises of significant profits. However, the money collected was used for personal expenses, investments, and payments to give credibility to the Ponzi scheme.
CryptoFX operated out of Houston, Texas, but attracted investors from multiple states and foreign countries. The SEC has filed charges against 17 individuals involved in the scheme, ranging from ages 28 to 60, who solicited money from investors by promising unrealistic returns ranging from 15% to 100%.
“We denounced CryptoFX as a $300 million pyramid scheme that targeted Latino investors with promises of financial freedom and life-changing wealth,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. The scheme involved the recruitment of new investors through seminars, Zoom meetings, and social networks, enticing them with false claims of risk-free investments.
The charges also reveal that some defendants continued to raise money even after the SEC intervened in CryptoFX operations. The mastermind, Mauricio Sánchez, used millions of dollars to fund a luxurious lifestyle, including purchasing homes, cars, jewelry, and splurging on extravagant expenses.
This elaborate scheme highlights the lengths to which scammers will go to deceive unsuspecting investors. The SEC is committed to pursuing charges against individuals involved in fraudulent activities and protecting investors from such scams in the future.