April 12, 2024 Breaking News, Latest News, and Videos

Santa Monica Warns Residents of Crypto Ponzi Scheme

City says 30 + households in Santa Monica have reported being victimized by CryptoFX, LLC

Over 30 households in Santa Monica have reported being victimized by a cryptocurrency Ponzi scheme allegedly operated by CryptoFX, LLC., a business that is currently under federal enforcement action in Texas. 

According to a press release from earlier this month, the City has received information that representatives of CryptoFX are continuing to solicit funds from local residents, primarily through the WhatsApp chat service.

The Securities and Exchange Commission (SEC) filed a complaint in September of 2022, alleging that CryptoFX engaged in a multi-million securities fraud that targeted Latino investors in several states, including California. The defendants reportedly held paid classes to educate and empower the Latino community to build wealth through crypto asset trading, but the classes were used as a guise to solicit money from participants.

The SEC complaint further alleged that the defendants lied about investment returns and guaranteed that investors would not bear any losses, while investment money was not used for crypto trading as promised. Instead, it was used to pay fake returns to investors and diverted for the defendants’ personal use. The court has since issued a temporary restraining order against the defendants and appointed a receiver to help recover and manage money and assets for the benefit of defrauded investors.

The City of Santa Monica urges residents who are looking to invest in crypto-related ventures to exercise extreme caution and conduct thorough research. If approached by representatives of CryptoFX or its affiliates, residents are advised to contact the appropriate agencies for assistance.

Resources available to affected residents include the California Department of Financial Protection and Innovation (DFPI), Haven Neighborhood Services, and an upcoming fraud prevention outreach event organized by the Santa Monica Police Department in collaboration with Familias Latinas Unidas.

You can file a complaint with the DFPI by clicking here.

Haven staff can help victims file claims with the court-appointed Receiver in the CryptoFX SEC case. For more information contact Diana Arciniega at diana.arciniega@havenservices.org or (213) 375-4663.

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