The SEC alleges that Touzi Capital deceived investors by claiming that their funds would be used to finance crypto mining operations when, in reality, they were used for unrelated expenses.
The United States regulator has initiated legal proceedings against Touzi Capital, an investment firm, for allegedly deceiving investors regarding the profitability and liquidity of its crypto asset mining fund.
The US Securities and Exchange Commission (SEC) issued a statement on Nov. 29 alleging that Touzi Capital defrauded over 1,200 US investors through security offerings of its crypto asset mining fund, resulting in the raising of “almost $95 million.”
Crypto mining operations were purportedly the basis for the investment proposal to investors. The SEC, however, maintains that this was inaccurate.
Touzi Capital allegedly “commingled investor funds” across its subsidiary businesses, directing the funds to ventures that were “unrelated” to crypto mining.
The SEC also accused Touzi Capital of deceiving investors regarding the profitability and hazards associated with its crypto mining asset fund.
According to the SEC, the defendants allegedly made patently false and/or misleading statements regarding the stability of these investments by comparing them to high-yield money market accounts.
The Securities and Exchange Commission (SEC) declared that the fund was “risky and illiquid” and continued to accept new investors despite the fact that its investments were “failing.”
It follows the denial of an appeal by a US federal judge to discharge an SEC litigation against the promoter of a crypto mining firm that is purportedly fraudulent and was involved in a $18 million scheme.
Nevertheless, Consensys CEO Joe Lubin anticipates that the ongoing legal disputes between crypto firms and the SEC will diminish following Donald Trump’s reelection as the 47th president of the United States.
He stated to Cointelegraph at DevCon 2024 in Thailand, “I have a sense that our industry is going to save hundreds of millions of dollars going forward, although not all the cases, not all elements of the case.”
Also Read: Taiwan to Implement Stringent Crypto AML Regulations on November 30
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