CYPRESS, Texas — A 42-year-old Cypress man, Brian Fontenot, has been arrested and indicted in connection with a multi-million dollar cryptocurrency fraud scheme that spanned several states and possibly countries.
Fontenot is one of eight partners from XUSD Blockchain Holdings now under indictment in the South Georgia Judicial District following a yearslong investigation by both state and federal authorities. The company is accused of creating a fraudulent cryptocurrency operation that scammed investors out of more than $3 million — with global losses potentially much higher.
Fontenot faces 91 counts, including racketeering, theft by deception, theft by conversion, and theft by taking. He was arrested at his home on Amber Patina Lane in Cypress last week during a search operation by the U.S. Marshals Service and Harris County Precinct 5 Constable’s Office, and is currently held in the Galveston County Jail awaiting extradition to Georgia.
Fontenot allegedly served as the chief technology officer of XUSD, responsible for writing the smart contracts and source code behind the cryptocurrency coins — XUSD, XUDG, and XUSDP. However, law enforcement sources caution that his role may have been more deceptive than technical.
According to investigators, the operation falsely promised an asset-backed cryptocurrency that would “revolutionize” the global economy. Victims were enticed with promises of life-changing profits and told that the U.S. dollar had no value. In reality, the cryptocurrency was never launched and investors were strung along with false release dates.
More than 100 victims have contacted law enforcement, having invested between $100 to $400,000 each. Communication between the victims and the company largely took place via Discord, where the focus was often on “getting rich” quickly.
Authorities say the suspects used investor funds to pay for luxury lifestyles, including living expenses, a $200,000 Range Rover, and private jet rentals.
“The case gets bigger every single day,” said Christopher Quinn, senior assistant district attorney for the South Georgia Judicial Circuit. Investigators believe many more victims, both in the U.S. and internationally, may still come forward.
