SEC Exposes CryptoFX for Operating a Fraudulent Ponzi Scheme

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The US Securities and Exchange Commission (SEC) has accused 17 individuals of operating a $300 million Ponzi scheme through CryptoFX, a supposed cryptocurrency trading platform. CryptoFX was registered as a crypto trading platform in Houston in February 2020.

However, the SEC took action in September 2022, halting the platform’s operations after suspecting it of being a fraudulent “crypto-asset Ponzi scheme.” On March 14 of the following year, the SEC identified the 17 individuals allegedly involved in the scheme.

According to Gurbir S. Grewal, director of the SEC’s Division of Enforcement, CryptoFX targeted Latino investors by promising them financial freedom and life-changing wealth through “risk-free” and “guaranteed” crypto and foreign exchange investments.

The SEC stated that CryptoFX primarily targeted crypto investors from the Latino community across 10 US states and two foreign countries. Grewal emphasized that such a large-scale Ponzi scheme requires multiple participants, and the SEC has charged the primary architects and perpetrators.