Skip to content Skip to sidebar Skip to footer


Source: Adobe Stock / Andriy Blokhin

The United States Securities and Exchange Commission (SEC) has filed an emergency action to stop an ongoing crypto Ponzi scheme targeting Latino investors.

According to an SEC Press releasethe scheme was operated by defendants Mauricio Chavez and Giorgio Benvenuto through CryptoFX – a company founded and controlled by Chavez.

The details of the case revealed in the Complaint to the SEC allege that Chavez pioneered the program in 2020 when he began running paid classes “with the ostensible goal of educating and empowering the Latino community to create wealth through the commerce of crypto assets”.

However, he had no experience, education or training in crypto investments or assets. The courses and seminars were just a way to solicit “unsophisticated investors” to donate their money to Texas-based CryptoFX to supposedly use in forex and crypto trading .

For his part, Benvenuto allegedly solicited a big investor in the scheme and helped divert funds from the scheme through CBT Group, a company he controls with Chavez. The program has raised more than $12 million from approximately 5,000 investors through this channel.

Chavez and Benvenuto then used more than 90% of the funds to pay fake returns to investors, support a lavish lifestyle, and buy and develop real estate. The SEC alleges the duo made about $2.7 million in Ponzi payments while embezzling nearly $8 million for their use, including nearly $1.5 million Chavez spent on cars, card payments credit, jewelry, adult entertainment and a house in his wife’s name.

SEC cracks down on crypto Ponzi schemes

The SEC charges the defendants with charges, including violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act; violating the Investment Advisers Act of 1940 and violating the securities registration provisions of the Securities Act.

The SEC is seeking a permanent injunction, civil penalties and the return of ill-gotten gains with interest, as well as a ban on Chavez and Benvenuto from serving as officers or directors of any public company.

The press release adds that the U.S. District Court for the Southern District of Texas issued an order freezing the assets of the defendants and also granted other emergency relief.

The case is just the latest bust the SEC has made in its redoubled efforts to end fraud in the crypto space and provide regulations for the market. In August, the securities market watchdog filed charges against 11 people involved in operating and promoting the $300 million Forsage crypto Ponzi scheme. reported by Reuters.



Source link

2 Comments

Leave a comment