The U.S. Securities and Exchange Commission (SEC) has accused Touzi Capital and its CEO Eng Taing of perpetrating nearly $120 million unregistered securities offering fraud.
According to the SEC’s complaint, the defendants raised approximately $118 million through false advertising of cryptocurrency mining and debt restructuring businesses from 2021 to early 2023.
This comprised nearly $100 million for mining of cryptocurrency and $23 million for restructuring of debts to investors. This goes across more than 1,000 investors in the United States.
Misleading Promotional Tactics and Misappropriation of Funds
The SEC alleges that Taing falsely promoted these investment opportunities as stable and predictable high-yield savings accounts, when in reality, they were highly speculative and illiquid.
Investors were led to believe their funds would be used for legitimate business operations, but the defendants are accused of misappropriating investor money for personal purposes.
Even as the underlying businesses began to collapse, the defendants continued to solicit new investors, further exacerbating the fraud.
Also Read: SEC Settles Charges Against Fair Invest & Khalid Parekh In $18.5 Million Crypto Investment Fraud
SEC’s Crackdown on Crypto-Related Enforcement Actions
This case is part of the SEC’s broader crackdown on fraudulent and misleading practices in the cryptocurrency industry.
In fiscal year 2024 alone, the SEC has filed nearly 600 enforcement actions, aiming to obtain a record financial compensation of over $8 billion.
These actions have targeted a wide range of crypto-related misconduct, including the historic $4.5 billion judgment against Terraform Labs and its co-founder, Do Kwon, for their role in the collapse of the TerraUSD and LUNA tokens.
Potential Consequences for Touzi Capital and Eng Taing
The SEC is now seeking permanent injunctions, civil penalties, and an officer and director bar against Eng Taing, the CEO of Touzi Capital.
This would effectively prevent Taing from serving in a leadership role within any public company, significantly limiting his ability to engage in future fraudulent activities.
The magnitude of the alleged fraud, the number of investors impacted, and the SEC’s pursuit of severe penalties all underscore the gravity of the charges and the regulator’s determination to hold the defendants accountable.
Broader Implications and Investor Protections
The Touzi Capital case highlights the SEC’s ongoing efforts to safeguard investors, particularly in the rapidly evolving cryptocurrency space.
By aggressively pursuing high-profile cases involving fraudulent schemes and misleading disclosures, the SEC aims to send a clear message that it will not tolerate such egregious violations of securities laws.
This crackdown serves to strengthen investor confidence and reinforce the importance of transparency and regulatory compliance in the digital asset market, ultimately promoting a healthier and more trustworthy crypto ecosystem.
Also Read: Utah Federal Judge Denies Appeal In SEC Lawsuit Against Alleged $18 Million Crypto Mining Fraud