US SEC Charges Touzi Capital Over $100M Securities Violations

The US Securities and Exchange Commission (SEC) has charged Touzi Capital and its founder, Eng Taing, with alleged securities violations. The SEC also accused the firm of fraud in how it commingled and misappropriated investors’ funds.

US SEC Charges Touzi Capital And Its CEO

In a press release, the US SEC announced that it had filed a civil action against Touzi Capital and its CEO, Eng Taing, for allegedly defrauding over a thousand investors in unregistered securities offerings that raised over $100 million.

The Commission’s complaint also alleges that the defendants misled investors in how they handled the proceeds from these offerings. The SEC stated that Touzi Capital and its CEO commingled and misappropriated investors’ funds and raised capital through false and misleading statements.

These statements included ones about the liquidity of their investments and other factors related to their profitability. For context, Touzi Capital is a firm that offers investment opportunities in real estate, blockchain, and private equity.

The US SEC handles issues related to securities violations, with their regulatory oversight extending to the crypto industry. However, CoinGape recently reported that Donald Trump plans to give the US Commodity Futures Trading Commission (CFTC) oversight of the $3 trillion crypto market, which will include matters related to blockchain technology.

Further Details Of The Commission’s Complaint

According to the US SEC’s complaint, between 2021 and early 2023, Touzi Capital and Taing conducted unregistered securities offerings of its crypto asset mining funds. The firm stated that these funds were to finance the operations of a particular crypto asset mining entity and raised almost $95 million from over 1,200 investors nationwide.

However, the firm looks to have misled investors in this regard. The Commission alleges that the defendants commingled these funds among its various businesses, some unrelated to crypto asset mining.

The CEO’s involvement was also highlighted as he allegedly misappropriated some of these funds for personal use while misleading investors on how much profit they were making from their business operations.

Similarly, the US SEC alleges that Touzi Capital raised almost $23 million for its debt rehabilitation business but commingled these funds with those of its crypto asset mining business and other unrelated businesses.

The Commission also allegedly misled investors about the stability of these investments, comparing them to high-yield money market accounts when, in fact, the investments were risky and illiquid. Despite this, the SEC said that Touzi continued to recruit more investments even after the investments began failing.

The SEC seeks permanent injunctions, disgorgement with prejudgement interest, and civil penalties against the defendants. It also wants an officer and director bar against Taing. Amid this development, another case is also in focus, as ex-CFTC and XRP lawyers say that the Commission could drop its appeal in the Ripple lawsuit.