US Targets Crypto Firm for Alleged $115M Investor Fraud

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Touzi Capital, LLC, and its founder and CEO, Eng Taing, accusing them of defrauding investors out of approximately $115 million through unregistered securities offerings tied to cryptocurrency mining funds. Cryptocurrency mining involves using powerful computers to verify blockchain transactions and earn digital currency rewards.

According to the SEC’s complaint, the investment firm raised nearly $95 million by claiming the funds would be used for crypto mining operations. Instead, the SEC alleges, Touzi Capital diverted substantial amounts into unrelated ventures through its subsidiaries, misleading more than 1,200 investors with promises of stability and high returns.

This lawsuit is part of a broader crackdown by the SEC on cryptocurrency-related schemes, as the commission seeks to protect investors in the rapidly evolving digital asset market. Touzi Capital is accused of marketing its crypto mining and debt rehabilitation ventures as stable, high-yield opportunities comparable to money market accounts, despite their speculative and high-risk nature.

The SEC contends that the investments were far from secure. The alleged fraudulent activities occurred between 2021 and early 2023, during which the firm also raised $23 million for debt rehabilitation projects.

The case against Touzi Capital adds to what has been described as a record-breaking year for SEC enforcement. In 2023 alone, the commission filed over 583 cases and secured $8.2 billion in financial penalties.