• Crypto Ponzi Scheme Claims Investor’s Funds: Up to 30 Latino investors have been victims of a crypto Ponzi scheme.
• SEC Executes Emergency Action to Stop Offering: Mauricio Chavez and Giorgio Benvenuto were running an unregistered crypto-asset offering in September 2022.
• Chavez Promised Investors High Returns Without Risk: He falsely presented himself as an advanced-level trader, giving the investors fake paperwork to complete and promising they won’t lose their funds.
Crypto Ponzi Scheme Claims Investor’s Funds
Up to 30 Latino investors have been victims of a crypto Ponzi scheme that led to the loss of funds. A City Hall warning disclosed that these residents had fallen victim to this fraud operation, cautioning others to be careful. The Latin Times report shared that the people behind the scam are employees of CryptoFX LLC, currently involved in a federal case in Texas.
SEC Executes Emergency Action
The defendants, Mauricio Chavez and Giorgio Benvenuto, were running an unregistered crypto-asset offering in September 2022 when regulators got wind of it and executed an emergency action to stop it. Chavez claimed he was well-versed in crypto trading and supposedly taught Latino residents how to make money by investing in CryptoFX so the firm could conduct digital asset and foreign exchange trading on their behalf.
Chavez Promises Investors False Returns
Chavez sold himself as an advanced-level trader, giving the investors fake paperwork to complete while promising they won’t lose their funds. However, he was never engaging in crypto trading but instead paying out investors with other people’s money based on the Ponzi scheme model. He used 90% of investors’ funds for his own benefit or for developing real estate under him and Benvenuto, and funding his wealthy lifestyle.
On the other hand, Benvenuto pulled in many investors into the scheme, using some of their money personally as well as for his own benefit.
Warning from SEC Officials
SEC officials warned about this activity by disclosing that Chavez had no training or experience about crypto assets or investments but presented himself as knowledgeable about digital assets trading nonetheless. They urged all potential investors to be wary against fraudulent schemes similar like this one before risking any capital into such investment opportunities without proper research first.
Although there are potential profits that can be made through investing into cryptocurrencies or digital assets, users must understand all risks associated with them before getting involved with any type of investment opportunity online which may lead not only financial losses but also legal issues if is not done properly according with each country laws regulations where you are located at