The US Securities and Exchange Commission (SEC) has shut down a $62 million global cryptocurrency trading and mining operation, and the DOJ has indicted the scheme’s CEO and founder. According to the Justice Department, if convicted on all counts, he faces a potential total sentence of 45 years in prison.
The SEC has put a stop to a $62 million global cryptocurrency fraud scheme.
The Securities and Exchange Commission (SEC) of the United States informed the public on Friday that it had shut down the operations of a fraudulent crypto mining and trading scam platform.
Mining Capital Coin International, its two founders Luiz Carlos Capuci Jr. and Emerson Souza Pires alongside two other organizations they established were all mentioned in SEC’s indictment.
The charges leveled against them bordered on “unregistered offerings and fraudulent sales of investment plans known as mining packages to thousands of investors,” according to the agency.
Capuci and Pires used their company, MCC to sell cryptocurrency mining packages to 65,535 investors worldwide. The platform guaranteed daily profits of 1%, paid weekly, for up to 52 weeks, according to the securities watchdog.
The indictment also claims that MCC investors were guaranteed bitcoin profits at first (BTC). The defendants thereafter “forced investors to withdraw their deposits in capital coin (CPTL), which was MCC’s own native token,” according to the complaint.
Capuci, the creator and CEO of MCC, a supposed cryptocurrency mining and investing platform, was also indicted in a $62 million global cryptocurrency fraud conspiracy, according to the US Department of Justice.
In the DOJ’s report of the indictment, Capuci gave investors untrue information about MCC’s cryptocurrency mining and investment program. This misleading information thus attracted the investors to buy into MCC’s “mining packages.”
All the individuals involved also assured investors that MCC had an international network of cryptocurrency mining devices that could provide investors with “significant income and guaranteed returns.”
They also promoted MCC’s own cryptocurrency as a decentralized autonomous organization that was “stabilized by revenue from the world’s largest cryptocurrency mining operation,” according to the DOJ. However, Capuci ran a fraudulent investment scheme, diverting investor funds to cryptocurrency wallets under his control rather than mining new cryptocurrency as promised.
“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would-be customers.”
Capuci is also accused of touting and fraudulently marketing MCC’s supposed “trading bots” as an extra investing mechanism to assist investors benefit in the cryptocurrency market, according to the indictment.
According to the DOJ, the MCC founder also reportedly recruited promoters and affiliates to promote MCC in a pyramid scheme, concealing the location and control of the fraud proceeds through several foreign-based cryptocurrency exchanges. Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to engage in international money laundering, according to the Justice Department. He faces a maximum sentence of 45 years in prison if convicted on all counts. Investigations are currently ongoing to determine the extent of the platform’s operations.