A federal jury has ruled that Ismael Sanchez is liable for securities fraud and registration breaches connected to the CryptoFX scheme that affected around 40,000 investors.
The decision represents a major milestone in regulatory efforts to clamp down on large-scale digital asset fraud across the United States.
The U.S. Securities and Exchange Commission confirmed on 12 February that the verdict followed detailed proceedings examining the structure and promotion of the investment operation.
Regulators stated that Sanchez played a central role in encouraging retail investors to commit funds to what prosecutors described as a fraudulent enterprise.
“We are pleased with the jury verdict holding Mr. Sanchez liable for fraud and other violations for his role in soliciting retail investors to put their money into this egregious Ponzi scheme. This action demonstrates our ongoing commitment to our core mission of protecting investors and holding wrongdoers accountable. I thank the trial team for its hard work and professionalism in trying this case,”
Margaret A. Ryan said.
Evidence presented during trial showed that Sanchez acted as a lead salesperson for CryptoFX and promoted claims that investor capital would be traded in crypto asset and foreign exchange markets.
Prosecutors demonstrated that, instead of generating legitimate returns, funds from new investors were used to pay earlier participants, reward sales agents, and cover personal expenditures.
Court records indicate that the operation attracted approximately $300 million from investors despite offering promises of 15% monthly returns.
A 2023 filing before the U.S. District Court for the Southern District of Texas outlined recovery efforts led by a court-appointed receiver.
The receiver disclosed that crypto holdings had been liquidated from Coinbase accounts, raising $982,924.31, and from Blockchain.com accounts, generating $1,161,140.95.
Additional funds were recovered from an Exodus wallet that held bitcoin, tether (USDT), and solana.
Investigators working with Blocktrace Inc. have been tracing thousands of wallet transactions to determine the movement of digital assets linked to the scheme.
Forensic findings revealed that actual cryptocurrency trading profits were negligible and could not support the high returns that were marketed to investors.