The SEC has taken legal action against Touzi Capital LLC and its managing member, Eng Taing, for allegedly defrauding over 1,200 investors and misusing funds raised for cryptocurrency mining operations.
According to the SEC’s lawsuit, Touzi Capital raised roughly $95 million by marketing unregistered securities between 2021 and 2023. Touzi Capital persuaded investors that their money would fund profitable crypto-mining initiatives. However, the SEC claims that these promises were fraudulent. Instead of being used as claimed, the majority of the funds were transferred to unrelated projects and personal costs.
The SEC further contends that Touzi Capital misled investors by promoting the fund as a steady, high-yield investment similar to money market accounts. In reality, Touzi Capital labeled the fund as “risky and illiquid,” citing fluctuating operational costs and subpar investment performance. Despite these challenges, the corporation allegedly continued to seek new investors while disguising its financial difficulties.
In addition to the alleged misuse of money for cryptocurrency mining, Touzi Capital reportedly raised an additional $23 million for a different debt rehabilitation project. Reportedly, the company squandered these funds and mixed them with other ventures.
The SEC has charged Touzi Capital and Taing with a number of securities crimes, including issuing unregistered securities and engaging in fraud. The regulator is seeking sanctions such as a permanent prohibition on future securities offerings, the recovery of misused monies, civil fines, and limitations on Taing’s capacity to take leadership positions in any company.
This lawsuit demonstrates the SEC’s commitment to combating fraudulent acts in the cryptocurrency sector, as it continues to advocate for tighter governance and enforcement in this quickly evolving business.
