By Nermeen Nabil Khear 
The United States Securities and Exchange Commission (SEC) has initiated legal action against investment firm Touzi Capital. According to its filing, the SEC claimed the investment firm misled investors by lying about its liquidity and the potential profits users would earn from its crypto asset mining platform. In the statement published by the regulator, the firm defrauded about 1,200 United States investors.
The regulator claimed that Touzi Capital misrepresented its capabilities, offering a fraudulent securities offering of its mining fund to investors. The SEC also revealed that it made a cumulative $95 million from the fraudulent scheme. The agency said the firm convinced investors by telling them to invest in their crypto mining platform, a claim the SEC found untrue.
Touzi Capital lied to investors about its capabilities
The SEC’s filing revealed that instead of carrying out the services it was paid for, it mixed all the funds from the investors and pushed it into other subsidiaries. Notably, the subsidiaries had no direct link to a crypto service or a mining facility. The SEC said Touzi Capital refused to explain the risks involved in its investment to investors, lying about the profitability level of its venture.
The SEC also discussed the fund’s stability, showing dissatisfaction with how the firm presented it. “The SEC alleges that the defendants made materially false and/or misleading statements as to the stability of these investments – comparing them to high-yield money market accounts,” the filing read. The SEC also revealed that the investment was highly risky, with those in charge of its activities still accepting new customers even after things started to go bad.
Uncertainty surrounds SEC cases amid dismissal threats
There have been uncertainties surrounding the cases that the SEC has tried over the last few years, with some risking dismissal. For instance, a United States Judge struck out an appeal from a promoter of an allegedly fraudulent crypto scheme to dismiss the SEC’s lawsuit against the company. The Scheme was said to have scammed users’ funds worth $18 million.
In his arguments, Kristoffer Krohn highlighted that the SEC failed to establish in its complaint letter if the green boxes, the lawsuit’s basis, were securities offerings or investment contracts. Despite Krohn largely arguing on why the SEC lawsuit should be canceled, including noting that the SEC confused elements that defined Securities in its Howey test, the Judge sided with the regulator.
However, there is a likelihood that most of the SEC’s legal battles against firms in the crypto sector will fade away soon. This is, in part, due to the emergence of Donald Trump as the president of the United States of America in the last election. Trump, during his campaign, made several promises to the crypto industry, with the industry looking to hold him to his promises when he takes office.
One such promise is to fire current SEC Chair Gary Gensler, who is set to step down before the new administration is sworn in. With Gensler stepping down, there have been intensified efforts to find a pro-crypto replacement. However, speculations still trail the cases tried by the SEC, with market participants predicting a likely dismissal of most cases. Consensys CEO Joe Lubin discussed it at the DevCon 2024 in Thailand, highlighting changes in the future. “Maybe not all the cases, maybe not all elements of the case, but I have a feeling that our industry is going to save hundreds of millions of dollars going forward,” he said.
Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap
This articles is written by : Nermeen Nabil Khear Abdelmalak
All rights reserved to : USAGOLDMIES . www.usagoldmines.com
You can Enjoy surfing our website categories and read more content in many fields you may like .
Why USAGoldMines ?
USAGoldMines is a comprehensive website offering the latest in financial, crypto, and technical news. With specialized sections for each category, it provides readers with up-to-date market insights, investment trends, and technological advancements, making it a valuable resource for investors and enthusiasts in the fast-paced financial world.