SEC Exposes Crypto FX for Operating $300 Million Ponzi Scheme

SEC Exposes Crypto FX for Operating $300 Million Ponzi Scheme

Cryptocurrency
March 15, 2024 by Diana Ambolis
162
The SEC claims that Crypto FX targeted cryptocurrency investors within the Latino community across 10 U.S. states and two foreign nations. The United States Securities and Exchange Commission (SEC) has taken legal action against 17 individuals allegedly involved in a $300 million Ponzi scheme linked to the crypto trading platform Crypto FX. Initially registered as
crypto Crypto Market

The SEC claims that Crypto FX targeted cryptocurrency investors within the Latino community across 10 U.S. states and two foreign nations.

The United States Securities and Exchange Commission (SEC) has taken legal action against 17 individuals allegedly involved in a $300 million Ponzi scheme linked to the crypto trading platform Crypto FX.

Initially registered as a crypto trading platform in Houston in February 2020, CryptoFX came under scrutiny when the SEC filed an emergency action in September 2022, halting its operations amid suspicions of ongoing fraudulent activities. On March 14, approximately 18 months later, the SEC identified the 17 individuals believed to be part of the scheme.

According to the SEC, CryptoFX targeted crypto investors within the Latino community across 10 U.S. states and two foreign countries. Grewal, a representative of the SEC, highlighted that such a large-scale Ponzi scheme requires numerous participants, leading to charges against both principal architects and perpetrators.

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The investigation revealed that several individuals associated with Crypto FX misused investors’ funds by falsely promising investments in potentially profitable cryptocurrencies and nonfungible tokens (NFTs), capitalizing on the hype surrounding the crypto bull market.

The SEC has petitioned the court to hold the individuals accountable for violating various sections of the Securities and Exchange Act. Additionally, the SEC seeks restitution of the funds obtained unlawfully and the imposition of civil penalties for the violations.

Furthermore, on March 6, the SEC announced a delay in its decision regarding the approval of options trading on spot Bitcoin exchange-traded funds (ETFs). This postponement grants the agency an additional 45 days, with a final decision expected by April 24, the maximum extension allowed by law.