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Mining Capital Coin CEO accused of $62 mln investment fraud

Mining Capital Coin CEO Luiz Capuci Jr. is accused of orchestrating a $62 million cryptocurrency fraud scheme

Published: May 10, 2022 04:56:42 PM IST

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The US Department of Justice (DOJ) has charged Luiz Capuci, the CEO and co-founder of crypto mining and investment platform Mining Capital Coin (MCC), with "purportedly orchestrating a $62 million global investment fraud conspiracy."

In connection with various allegedly fraudulent operations run via MCC, the DOJ has charged Capuci with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to engage in international money laundering. He risks a maximum prison sentence of 45 years if convicted.

Capuci allegedly promised "significant income and guaranteed returns by using investors' money to mine new cryptocurrencies" as part of the mining packages but allegedly failed to deliver on the promise. Capuci is also accused of marketing dodgy MCC trading bots that could execute "thousands of trades per second" and create daily returns for investors.

"As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators," the DOJ indictment reads.

On the same day as the DOJ's indictment, the SEC issued fraud allegations against MCC, co-founder Emerson Pires, Capuci, and two companies controlled by Capuci, CPTLCoin Corp. and Bitchain Exchanges.

According to the SEC’s complaint, “MCC, Capuci, and Pires sold mining packages to 65,535 investors worldwide and promised daily returns of 1 percent, paid weekly” over the course of a year.

As stated by the SEC, investors were promised Bitcoin (BTC) profits at first; however, it was later changed to MCC's Capital Coin, which could only be redeemed on Bitchain, a "fake crypto asset trading website established and maintained by Capuci."

Users were only given the option of purchasing another mining package or forfeiting their funds when it came time to withdraw their funds. The SEC alleges that Pires and Capuci “pocketed at least $8.1 million from the sale of the mining packages and $3.2 million in initiation fees.”

“As the complaint alleges, Capuci and Pires took every opportunity to extract more money from unsuspecting investors on false promises of outlandish returns and used investor funds raised from this fraudulent scheme to fund a lavish lifestyle, including purchasing Lamborghinis, yachts, and real estate,” said A. Kristina Littman, chief of the SEC enforcement division’s Crypto Assets and Cyber Unit.

Last month, the District Court for the Southern District of Florida granted a temporary restraining order and an order freezing the defendants' assets, according to the SEC.

Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash