• A crypto Ponzi scheme has recently been uncovered, with many Latino investors losing funds as a result.
• The scam was conducted by CryptoFX LLC and their employees, Mauricio Chavez and Giorgio Benvenuto.
• Chavez lured investors in by claiming to be an advanced-level trader with knowledge of the crypto market, when he had no such training or experience.
Crypto Ponzi Scheme Targets Latino Investors
A recent City Hall warning revealed that up to 30 residents have fallen victim to a crypto Ponzi scheme, leading to the loss of funds. The fraud operation was conducted by CryptoFX LLC, a company currently involved in a federal case in Texas.
Chavez Misleads Investors With Fake Promises
The two defendants behind the scam are Mauricio Chavez and Giorgio Benvenuto who ran an unregistered crypto-asset offering to Latino investors in September 2022. According to SEC officials, Chavez falsely presented himself as an experienced trader who could teach others how to make more money from trading digital assets such as Bitcoin and NFTs. He then solicited them to invest in CryptoFX so it can conduct digital asset and foreign exchange trades on their behalf. However, he had no training or education related to crypto investments or assets.
Ponzi Scheme Model Used To Pay Out Investors
Chavez used 90% of investor’s funds for personal gain – mainly paying out other investors using this Ponzi scheme model – developing real estate under him and Benvenuto, as well as funding his wealthy lifestyle. Meanwhile Benvenuto drew more investors into this fraudulent system using some of their money for personal gain also.
SEC Emergency Action Halts Offering
When regulators got wind of these illegal dealings, the SEC took emergency action against CryptoFX LLC to stop the offering from continuing any further. The agency is now actively seeking restitution for all harmed victims and requiring those responsible for criminal charges accordingly.
Crypto Users Must Take Caution
This incident serves as a reminder that cryptocurrency users must always be aware of potential risks associated with investing in digital assets – such as scams, pump-and-dump schemes, exchange hacks etc.. People should always do research before making any type of investment decision and never trust anyone claiming expertise without verifying credentials first