The US Securities and Exchange Commission (SEC) has sued Touzi Capital LLC, a cryptocurrency mining company, and its managing member Eng Taing, for multiple securities law violations. The US securities regulator alleges that the defendants deceived investors out of funds worth up to $115 million.
sik vs. Tozi Capital and Engineer Ting
In a Release the lawsuit On November 29, the SEC said that Taing and Touzi Capital provided investors with unregistered securities in the form of digital asset mining investment shares from 2021 to early 2023. The defendants raised approximately $95 million from more than 1,200 investors by promoting these securities as an opportunity to finance a cryptocurrency mining operation.
However, the Commission explains that Touzi Capital mismanaged these funds, with some of them diverted to unrelated businesses or spent on Engineer Taing’s personal expenses. At the same time, the defendants also misled investors about the supposed profitability status of their mining operations, which suffered from fluctuating energy costs and equipment issues.
In a separate move, Touzi Capital under Eng Taing also secured another $23 million investment in the debt rehabilitation business which was similarly mixed with funds from various companies.
The SEC alleges that the defendants deceived investors about the safety of both investments that were highly volatile and illiquid but were described as high-yield stable money market accounts. In addition, Ting and Tozi continued to market these securities to investors despite apparent operational failure.
SEC Prayer
In the formal complaint filed in the U.S. District Court for the Southern District of California, the SEC accuses Touzi Capital and Eng Taing of offering unregistered securities and violating Sections 5(a) and 5(c) of the Securities Exchange Act of 2019. 1993. The defendants are also charged with securities fraud pursuant to Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5.
If found guilty, the commission seeks to impose multiple sanctions against Tozi and Taing which include a permanent injunction prohibiting the accused from engaging in similar illegal activities. Additionally, defendants may be subject to dismissal as they are required to return any profit they earned through these misleading investments. Other potential penalties include civil and officer and director fines against Eng Taing.
On a lighter note, the cryptocurrency market is now worth $3.32 trillion after a slight decline of 0.43% in the past day.
Featured image from Novian & Novian, chart from Tradingview
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