Texas-based company CryptoFX has been ordered by the U.S. Securities and Exchange Commission (SEC) to immediately cease operations over defrauding the Latino community.
This follows because the company run by Mauricio Chavez and Giorgio Benvenuto misused crypto currency assets to get a sum of money from investors who have no knowledge.
It is understood that investors like the following believe too much in the sweet words of CryptoFX companies that promise huge returns if they invest with them.
Meanwhile, Chavez has been setting up paid seminars since 2020 to educate the Latino community on building wealth through crypto asset trading despite his lack of experience in digital currency investing.
But the seminar uses a referral system to encourage investors to give their money to CryptoFX.
He is also accused of giving investors false documents as a promise that they will not have to bear any loss or risk if they invest in his company.
According to the SEC, CryptoFX managed to collect $12 million from the scam and Chaves used 90% of his funds, $2.7 million, to pay false returns to investors to get them to trust him.
He was also found to have bought luxury items such as cars, jewelry, houses as well as real estate purchases for his own benefit of $8 million.
In addition, Benvenuto is accused of diverting funds to his own account shortly after a large investor joined the fraud scheme.
