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The SEC is suing 17 people in a $300 million Ponzi scheme impersonating cryptocurrency trading platform CryptoFX.

The scam used false investment promises to attract funds from investors, and then used those funds to make payouts to earlier participants in a Ponzi scheme.

Date: 2024-03-15 Author: Marek Stiller
The SEC is suing 17 people in a $300 million Ponzi scheme impersonating cryptocurrency trading platform CryptoFX.

The U.S. Securities and Exchange Commission (SEC) has taken legal action against 17 individuals involved in a $300 million Ponzi scheme allegedly operating under the name CryptoFX, a cryptocurrency trading platform.

The charges brought by the Securities Exchange Commission(SEC) reveal fraudulent activities targeting Latin American investors with promises of good financial performance and returns on investments in cryptocurrencies and currencies.

In February 2020. CryptoFX was officially registered as a cryptocurrency trading platform in Houston. However, in September 2022. The SEC took extraordinary action to halt the platform’s operations due to suspicions about its activities.

on March 14, nearly 18 months later, the SEC identified and charged 17 individuals believed to be the creators of the pyramid scheme.

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CryptoFX took advantage of Hispanic investors

According to Gurbir S. Grewal, director of the SEC’s Division of Enforcement, CryptoFX exploited Latino investors by offering them the illusion of risk-free investments in cryptocurrencies and non-convertible tokens(NFTs) that would allegedly lead to life-changing wealth.

The Hispanic community living in multiple U.S. states and two other countries were the primary recipients of the scheme. The SEC’s investigation found that individuals affiliated with CryptoFX misused investors’ funds, diverting them to their own purposes instead of making legitimate investments in cryptocurrencies and NFTs.

In light of the booming cryptocurrency market, investors were further incentivized to participate in the scheme. In response, the Securities Exchange Commission (SEC) accused the main originators and perpetrators of the pyramid scheme of violating several articles of the Securities and Exchange Act.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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