SEC Accuses 17 People of Organizing CryptoFX Pyramid Scheme

Reading Time: < 1 minute

The US Securities and Exchange Commission (SEC) has taken legal action against 17 employees of CryptoFX, a financial pyramid scheme, for defrauding investors of $300 million.

According to Gurbir Grewal, the SEC’s Enforcement Director, CryptoFX operated in ten US states and two other countries and targeted 40,000 investors with false promises of financial freedom and life transformation through supposedly risk-free crypto investments.

In October 2022, the SEC shut down CryptoFX after discovering that it had attracted over $12 million from 5,000 investors since 2020. The victims were promised profits ranging from 15% to 100%.

However, instead of using the funds for trading digital assets as promised, the organizers used the money to pay commissions and bonuses to other investors, as well as to finance their own luxurious lifestyle. One of the defendants even bought a $1 million house in Texas.