SEC busts CryptoFX for running $300 million Ponzi scheme.
The United States Securities and Exchange Commission has charged 17 individuals with orchestrating a $300 million Ponzi scheme under the guise of the CryptoFX trading platform.
CryptoFX was registered as a crypto trading platform in February 2020 in Houston. In September 2022, the SEC filed an emergency action to halt all operations of CryptoFX, an ongoing crypto-asset Ponzi scheme. Eighteen months later, on March 14, the SEC identified 17 individuals allegedly involved in the scheme.
SEC Enforcement Division Director Gurbir S. Grewal said:
“We say CryptoFX was a $300 million Ponzi scheme targeting Latino investors with financial freedom and life-changing wealth in ‘risk-free' and ‘proven' crypto and foreign exchange instruments.”
According to an SEC report, CryptoFX allegedly targeted crypto investors from the Latino community in 10 US states and two foreign countries. Grewal said such a large-scale Ponzi scheme required multiple participants, and the SEC charged the principal architects and perpetrators.
The SEC has found several individuals linked to CryptoFX that misappropriated investors' funds by falsely promising to invest in potentially profitable cryptocurrencies and non-viable tokens (NFTs). At the time, investors were fooled by the ongoing crypto bull market.
The SEC has asked the individuals to indict them for various violations of the Securities and Exchange Act. In addition, the SEC wants the 17 individuals to “release” or return the money and also pay civil penalties for the violations.
Related: Senators push SEC's Gensler not to approve any more crypto ETFs
On March 6, the SEC officially extended its decision on the approval of trading in spot Bitcoin (BTC) exchange-traded funds (ETFs).
The delayed decision gives the agency an additional 45 days — the maximum 90 days under the law — to reach a final decision, which is April 24.
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