The Securities and Exchange Commission (SEC) has launched a legal battle against Touzi Capital, accusing the investment firm of deceiving investors regarding the profitability and liquidity of its crypto mining pool.
The firm allegedly misled more than 1,200 US investors, raising close to $95 million through its mining investment's security offerings.
According to the SEC’s statement released on November 29, Touzi Capital promoted the funds as a way to invest in mining operations. Unfortunately, the SEC contends that this claim was misleading and false.
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Rather than investing in crypto mining, Touzi Capital is accused of using investor funds for unrelated ventures, channeling the money into other operations that had no connection to cryptocurrency mining.
The SEC’s allegations also include misleading statements about the investment's stability and potential returns. According to the statement, it reads:
The SEC alleges that the defendants made materially false and/or misleading statements as to the stability of these investments – comparing them to high-yield money market accounts.
In reality, the SEC argues, the fund was both "risky and illiquid," and the firm continued to accept new investors even as it faced growing losses and failed investments.
As regulators crack down on fraudulent crypto schemes, the crypto world continues to face security challenges. Just recently, five hackers were charged in a $11 million crypto heist. How did they manage to pull it off? Read the full story.
