30 Latinos Fall Prey to a Targeted Crypto Ponzi Scheme from CryptoFX

Image Source: Photo by Anna Tarazevich: https://www.pexels.com/photo/scam-alert-letting-text-on-black-background-5697256/

Users and fans of cryptocurrencies are well aware of the dangers associated with buying and holding digital assets.

Investors risk losing money in various ways, including price collapses, fraud, exchange and system hacks, Ponzi schemes, and more.

Several Latino investors lost money in a cryptocurrency Ponzi fraud that just hit the news. Warnings issued by city officials indicated that as many as 30 locals had fallen prey to the scam.


Money Lost in a Crypto Ponzi Scheme

According to the Latin Times (1), as many as 30 people have reported losing money to crooks. The perpetrators are CryptoFX LLC workers, a firm currently embroiled in a federal prosecution in Texas.


Whales on a Spending Spree?

In September of 2022, defendants Mauricio Chavez and Giorgio Benvenuto were conducting an unregistered offering of crypto-assets to Latino investors. The SEC took swift steps to halt the offering once it became aware of the illegal nature of the dealings.

According to the media report, the SEC officials revealed (2) that Chavez professed knowledge in crypto trading and reportedly taught Latino people how to make more money. Bitcoin and non-fungible tokens were his chosen symbols for the victims’ ability to exchange and increase their wealth through cryptocurrency.

But when locals attend his lecture, he’ll try to convince them to put money into CryptoFX so that it can trade digital assets and currencies on their behalf.

Yet, the SEC found out that he knew nothing about crypto assets or investing. He duped investors by posing as a savvy trader, providing them with phony forms to fill out, and assuring them that their money was safe. Moreover, Chavez never actually traded cryptocurrencies but used the Ponzi scheme technique to pay off investors.

He plowed 90% of the money into paying off other investors, real estate development with Benvenuto, and his lavish lifestyle.

However, Benvenuto attracted numerous investors to the scam, spent part of their money personally, and redirected some of it through GBT Group, a firm he and Chavez owned.

The SEC claims that the two paid back investors a total of $2.7 million and spent another $8 million on themselves. Chavez’s personal expenditures of about $1.5 million on things like vehicles, jewelry, a home, payments with credit cards, adult content, etc., were also revealed.


City Hall Issues a Warning

City Hall warned about the cryptocurrency Ponzi scheme after numerous citizens reported it this past week. The city said in the alert that numerous CryptoFX salespeople are still actively phishing for payments from citizens over WhatsApp chat.

Thus, the municipality advised its citizens to be wary of crypto-related proposals and conduct thorough research before making any financial commitments. They were also told to report to the authorities if they were contacted by CryptoFX representatives who requested financial information.

The alert included a link to a website where people may report losses and seek compensation. The California Department of Financial Protection and Innovation (3) also has a claims-filing website.

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