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SEC Halts $62M Global Cryptocurrency Fraud Scheme

The Securities and Exchange Commission (SEC) of the United States said on Friday that it has terminated a fraudulent crypto mining and trading scam.

MCC International (aka Mining Capital Coin), its creators (Luiz Carlos Capuci Jr. and Emerson Souza Pires), and two corporations managed by them were prosecuted by the SEC. According to the agency, the allegations are "in connection with the unregistered offers and fraudulent sales of investment plans known as mining packages to thousands of investors."

Since at least January 2018, the securities regulator has detailed:

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 case also claims that MCC investors were initially guaranteed bitcoin profits (BTC). The defendants, however, eventually "forced investors to withdraw their deposits in capital coin (CPTL), which was MCC's own token."

DOJ Charges MCC’s Founder and CEO

The US Department of Justice (DOJ) also stated on Friday that Capuci, the creator and CEO of MCC, a claimed cryptocurrency mining and investing platform, had been charged in a $62 million worldwide cryptocurrency fraud scheme.

According to the DOJ, Capuci of Port St. Lucie, Florida, deceived investors about his platform's cryptocurrency mining and investment program, persuading them to invest in MCC's "mining packages." He and his co-conspirators stated that MCC had a multinational network of cryptocurrency mining devices that could provide investors with "significant income and assured returns."

They also promoted MCC's own cryptocurrency as a putative decentralized autonomous organization "stabilized by money from the world's largest cryptocurrency mining operation," according to the DOJ, adding:

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.

Capuci is also accused of touting and falsely 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 additionally reportedly recruited promoters and affiliates to promote MCC in a pyramid scheme, and he further hid the location and control of the fraud profits by laundering the monies through multiple foreign-based cryptocurrency exchanges. The Justice Department also stated:

Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 45 years in prison.

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