U.S. Regulator Halts $62 Million Crypto Mining And Trading Scheme

The U.S. Securities and Exchange Commission (SEC) has halted a $62 million global cryptocurrency trading and mining scheme and the Department of Justice (DOJ) has accused the CEO and co-founder of crypto mining platform Mining Capital Coin (MCC) Luiz Capuci of involvement in the same.

If convicted, the MCC founder will face a maximum total penalty of 45 years in prison.

The SEC announced Friday that it has charged MCC International, its founders Capuci Jr. and Emerson Souza Pires, and two entities controlled by them.

The charges are “in connection with the unregistered offerings and fraudulent sales of investment plans called mining packages to thousands of investors,” the agency said.

The securities watchdog said, "Since Jan. 2018, MCC, Capuci, and Pires sold mining packages to 65,535 investors worldwide and promised daily returns of 1 percent, paid weekly, for a period of up to 52 weeks."

The complaint also alleged that MCC investors were initially promised returns in Bitcoin. However, the defendants later “required investors to withdraw their investments in tokens called capital coin (CPTL), which was MCC’s own token.”

The DOJ also independently announced Friday that Capuci has been indicted in a $62 million global cryptocurrency fraud scheme.

According to the DOJ’s indictment, Capuci, alongside unnamed co-conspirators, is accused of misleading investors over the profit-bearing potential of MCC mining packages and native token Capital Coin that was backed by the “biggest cryptocurrency mining operation in the world.”

“As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control," the DOJ said.

The MCC founder also allegedly recruited promoters and affiliates to promote MCC in a pyramid scheme, the DOJ said.