The Securities and Exchange Commission has filed charges against CryptoFX LLC, alleging a $300 million crypto Ponzi scam. The SEC states that 17 individuals have been charged in a plot based in Texas that targeted the Latino community in the US as well as other countries. The SEC notes that it filed an emergency action in September 2022 to halt the operation while charging principals Mauricio Chavez and Giorgio Benvenuto.
The SEC claims that CryptoFX purported to trade in crypto assets and foreign exchange markets for investors. Instead, CryptoFX used investor funds for their own benefit while providing some of the money to cover the bogus returns for investors. CryptoFX claimed it was able to generate returns of between 15% to 100%. Mor than 40,000 investors were said to have been impacted. While raising approximately $300 million, only $2.6 million in profits were said to have been generated.
The SEC’s complaint also claims that two of the defendants, spouses Gabriel and Dulce Ochoa, continued to solicit investments after the court issued orders to halt the CryptoFX in September 2022, and Gabriel Ochoa instructed two investors to rescind their complaints to the SEC for them to recover their investments. Another defendant, Maria Saravia, allegedly told investors that the SEC’s lawsuit was fake.
The SEC’s complaint has been filed in U.S. District Court for the Southern District of Texas. The SEC charges Gabriel and Dulce Ochoa, Saravia, Gloria Castaneda, Ismael Zarco Sanchez, and Roberto Zavala with violating the antifraud, securities-registration, and broker-registration provisions of the federal securities laws.
The complaint charges Gabriel Arguelles, Hector Aquino, Orlin Wilifredo Turcios Castro, Carmen De La Cruz, Elizabeth Escoto, Reyna Guiffaro, Marco Antonio Lemus, Juan Puac, Luis Serrano, Julio Taffinder, and Claudia Velazquez with violating the securities-registration and broker-registration provisions.
In addition, the complaint charges Gabriel Ochoa with violating the whistleblower protection provisions. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.
Without admitting or denying the allegations in the SEC’s complaint, Serrano and Taffinder consented to the entry of final judgments, subject to court approval, that permanently restrain and enjoin them from violating the securities registration and broker-registration provisions of the federal securities laws. Serrano and Taffinder agreed to pay more than $68,000 combined in civil penalties, disgorgement, and interest.
The SEC is asking impacted individuals to contact that at CFXvictims@sec.gov.
