U.S. security watchdog halts $62 million crypto mining and trading scheme

May 9, 2022

By Anjali Kochhar

The U.S. Securities and Exchange Commission (SEC) has halted a $62 million global cryptocurrency trading and mining scheme and the Department of Justice (DOJ) has accused the CEO and co-founder of crypto mining and investment platform Mining Capital Coin (MCC) Luiz Capuci for his involvement in the same.

The SEC announced Friday that it has halted a fraudulent crypto mining and trading scheme.

The SEC charged MCC International, its founders Capuci Jr. and Emerson Souza Pires, and two entities controlled by them.

The charges are “in connection with the unregistered offerings and fraudulent sales of investment plans called mining packages to thousands of investors,” the agency noted.

The securities watchdog said, “Since Jan. 2018, MCC, Capuci, and Pires sold mining packages to 65,535 investors worldwide and promised daily returns of 1 percent, paid weekly, for a period of up to 52 weeks.”

The complaint also alleged that MCC investors were initially promised returns in bitcoin (BTC). However, the defendants later “required investors to withdraw their investments in tokens called capital coin (CPTL), which was MCC’s own token.”

The U.S. Department of Justice (DOJ) also independently announced Friday that Capuci has been indicted in a $62 million global cryptocurrency fraud scheme.

According to the DOJ’s indictment, Capuci, alongside unnamed co-conspirators, is accused of misleading investors over the profit-bearing potential of MCC mining packages and native token Capital Coin that was backed by the “biggest cryptocurrency mining operation in the world.”

As part of the mining packages, Capuci is said to have touted “substantial profits and guaranteed returns by using investors’ money to mine new cryptocurrency” but allegedly failed to deliver on the bargain.

“As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control,” the DOJ said.

The MCC founder also allegedly recruited promoters and affiliates to promote MCC in a pyramid scheme, the DOJ said.

The Justice Department added, “Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 45 years in prison.”

 


About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects

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