The US Securities and Exchange Commission (SEC) has filed a lawsuit against Touzi Capital LLC, a crypto mining company, and its managing member Eng Taing over multiple securities law violations. The US securities regulator claims the defendants allegedly deceived investors and misappropriated funds to the tune of $115 million.
SEC Vs. Touzi Capital And Eng Taing
In a litigation release on November 29, the SEC stated that Taing and Touzi Capital offered investors unregistered securities in the form of digital asset mining investment shares from 2021 to early 2023. The defendants raised approximately $95 million from over 1,200 investors by promoting these securities as an opportunity to fund a crypto-mining operation.
However, the commission explains that Touzi Capital mismanaged these funds, some of which were diverted into unrelated business or spent on personal expenses of Eng Taing. Meanwhile, the defendants also misled investors on the profitability status of the supposed mining operations, which suffered from fluctuating energy costs and equipment issues.
In a separate move, Touzi Capital under the leadership of Eng Taing also secured another $23 million investment for a debt rehabilitation business which was similarly commingled with funds from various businesses.
The SEC alleges that the defendants deceived investors on the safety of both investments which were highly volatile and illiquid but rather described as stable high-yield money market accounts. In addition, Taing and Touzi continually marketed these securities to investors even despite apparent operational failure.
The SEC’s Prayer
In the official complaint submitted at the US District Court for the Southern District of California, the US Securities regulator is charging Touzi Capital and Eng Taing for offering unregistered securities and violations of Sections 5(a) and 5(c) of the Securities Act of 1993. The defendants are also accused of perpetrating securities fraud as against Sectio
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Author: Semilore Faleti
