The United States Securities and Exchange Commission (SEC) has halted a digital asset Ponzi scheme that targeted Latino investors. CryptoFX claimed to be an educational initiative seeking to empower the community. However, the founders only used it to defraud millions from investors, most of which they allegedly squandered on a lavish lifestyle.
The SEC first brought its charges against CryptoFX and its founder, Mauricio Chavez, on September 19, filing an emergency action to stop its “ongoing fraudulent and unregistered crypto asset offering.” A court hearing in Texas on September 29 upheld the SEC’s charges and granted an extended asset freeze on Chavez and his co-conspirator Giorgio Benvenuto.
In its charges, filed in the Southern District of Texas, the SEC claimed that Chavez founded CryptoFX in February 2020 with the goal of educating the Latino community about digital assets. This was despite not having any prior education or experience in digital assets or trading; he previously worked as a landscaper before diving into digital assets.
Chavez went on to recruit hundreds of “students” for his venture, and after their “training,” he’d require them to invest in his company. He also solicited funds from investors beyond his program who wanted his company to trade for them, authorities said.
The SEC said Chavez made several misleading and false statements to lure investors. These included saying that he had generated $5 million in profits over the…
