An indictment was unsealed that charges Mining Capital Coinâ€™s CEO for allegedly orchestrating a $62m global investment fraud scheme.
In a statement, assistant attorney General Kenneth A. Polite, Jr. of the Justice Departmentâ€™s Criminal Division said, â€œCryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limits the ability of legitimate entrepreneurs to innovate within this emerging space.
â€œThe department is committed to following the money â€” whether physical or digital â€” to expose criminal schemes, hold these fraudsters accountable, and protect investors.â€
According to the indictment, Luiz Capuci misled investors about Mining Capital Coinâ€™s cryptocurrency mining and investment program, which investors could buy Mining Packages.
Through this scheme, a Capuci and his co-conspirators allegedly professed its international network of cryptocurrency mining machines could generate substantial profits and guarantee returns by using investor money to mine new cryptocurrency.
Capuci also touted Mining Capital Coinâ€™s own cryptocurrency, Capital Coin, was a purported decentralised autonomous organisation that was â€œstabilised by revenue from the biggest cryptocurrency mining operation in the world,â€ it said.
The indictment claims Capuci instead transferred the investment funds to cryptocurrency wallets under his control.
U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida said, â€œThis office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency.
â€œAs with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.â€
The indictment also alleges that Capuci fraudulently marketed Trading Bots as an additional investment mechanism for investors to invest in the cryptocurrency market. Capuci claimed Mining Capital Coin joined with developers from Asia, Russia and the US to build improved Trading Bots.
The indictment also claims Mining Capital Coinâ€™s Trading Bots operated in hight frequency and could complete thousands of trades each second to generate daily returns for investors. However, the bots supposedly were not used to generate income for investors, but were used to divert funds to Capuci and co-conspirators, it said.
Capuci has been charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all accounts, he faces a maximum total penalty of 45 years in prison.
The case is being investigated by the FBI Miami Field Office and HSIâ€™s Miami Field Office.
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