- The SEC charged 17 individuals in a $300 million Ponzi scheme exploiting Latino communities with false ‘risk-free’ crypto investment promises.
- Despite legal actions, Gabriel and Dulce Ochoa continued soliciting investments, blatantly ignoring court orders and undermining regulatory efforts.
The Securities and Exchange Commission (SEC) has recently uncovered and taken action against a massive fraudulent operation in the cryptocurrency domain. This case involves an alleged $300 million Ponzi scheme orchestrated by CryptoFX, a Texas-based entity. This fraudulent scheme exploited Latino communities, offering false promises of financial security and substantial wealth through what were purported to be ‘risk-free’ and ‘guaranteed’ investments in crypto and foreign exchange markets.
This operation, according to investigations, diverted funds from its investors away from the purported trading activities. Instead, these funds were used to create the illusion of profitability, with payouts to earlier investors funded by the capital from new entrants—a classic characteristic of a Ponzi scheme. Moreover, a significant portion of the collected funds was used for personal gain by the defendants, including extravagant expenses such as the purchase of a $1 million house in Texas.
The impact of this scheme was widespread, affecting 40,000 investors across ten U.S. states and extending into two other countries, illustrating the extensive reach of CryptoFX’s deceitful practices and the deep trust misplaced by investors in its false assurances.
Through the SEC’s enforcement actions, details have emerged about how the scheme operated. Allegedly, 17 individuals, identified as the main actors in this network, systematically solicited investments under false pretenses, claiming potential returns ranging from 15% to 100%.
Their operations were conducted in violation of the laws regulating securities registration and the provision of brokerage services, adding to the illegal nature of their actions.
Notably, despite legal efforts to cease the operation of this scheme, certain individuals, including Gabriel and Dulce Ochoa, continued their solicitation efforts, ignoring legal injunctions.
There were even attempts to undermine the regulatory process, with investors being advised to withdraw their complaints to the SEC, an act that sought not only to extend the operation’s duration but also to evade regulatory oversight.
