A cryptocurrency executive from Cypress, Texas, is facing serious legal charges for his alleged involvement in a scheme that defrauded investors. Brian Fontenot II, the Chief Technology Officer of XUSD, is currently in jail in Galveston County, awaiting extradition to Georgia, where he faces 90 criminal charges.
This indictment follows a multi-year FBI investigation and further action by local authorities in Baker County, Georgia.
Details of the Alleged Scheme
Brian Fontenot and several other individuals, including XUSD’s founder, James Nelson, were indicted in May 2025. Investigators claim that during a meeting in Georgia in 2021, XUSD representatives misled potential investors about the cryptocurrency’s backing.
They allegedly claimed that XUSD coins were supported by precious mineral mines and even a Chinese imperial gun box valued at $100 trillion.
Houston attorney Geoff Berg, who has represented cryptocurrency scam victims, commented on the audacity of the claim, stating, “I’m not sure the planet earth has that kind of money,” in reference to the alleged $100 trillion gun box.
Prosecutors allege that Fontenot and his partners raised over $3 million in 2021, which they then misappropriated for their personal use and side ventures.
XUSD’s Continued Operations Despite Indictment
Despite the criminal charges, XUSD appears to continue operating. In March 2025, the company entered into a naming rights deal with the Quad City Steamwheelers, an Indoor Football League team.
Fontenot was featured in a YouTube video during halftime of a Steamwheelers game, where he claimed that XUSD was “the most powerful stablecoin in the world,” supported by an asset pool of $414 trillion in physical assets. This amount, prosecutors note, is more than 14 times the size of the entire U.S. economy.
Investors and Impact
The court documents do not specify who invested in XUSD or whether any of the victims are from the Houston area. However, attorney Geoff Berg suggests that many of the victims could be elderly or have impaired mental faculties, which is common in such scams.
The massive claims made by the company could be a red flag for vulnerable investors, leading them to be misled into investing in a cryptocurrency with no real backing.
Investigation and Arrest
In the course of their investigation, authorities from the Harris County Precinct 5 Constable’s Office executed a search warrant at Fontenot’s home in Cypress last week.
They were looking for evidence linking him to the operations of XUSD. Fontenot was arrested on the same day in Galveston County, and he has indicated that he will not fight extradition to Georgia to face the charges.
The case of Brian Fontenot and XUSD is yet another example of the dangers of cryptocurrency fraud. With multi-million-dollar claims and misleading promises of unprecedented backing, investors are urged to be cautious and vigilant.
As the legal process unfolds, the community will likely learn more about the extent of the scheme and its impact on those who trusted XUSD with their investments.
