Mining Capital Coin CEO and founder Luiz Capuci Jr. was — in an indictment unsealed yesterday — accused by the DOJ of allegedly working a $62 million international funding fraud scheme. He’s the newest of a number of crypto firm heads who’ve not too long ago been equally charged.
Through his firm, Capuci satisfied traders to buy “Mining Packages,” a global network of cryptocurrency mines that promised a certain return on investment every week. But instead of using investors’ funds to mine cryptocurrency as he promised, the DOJ alleges that Capuci diverted the funds to his own cryptocurrency wallets. Another MCC product known as “Trading Bots” operated below the identical false pretenses. Capuci claimed that the bots operated in “very high frequency, being able to do thousands of trades per second” and promised traders every day returns.
“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,” wrote the DOJ in its indictment.
MCC appeared to have all of the workings of a pyramid scheme. Capuci recruited associates and promoters to lure traders. In return, he promised the promoters quite a few lavish items, together with Apple watches, iPads and luxurious automobiles.
Currently the FBI’s Miami Field Office is investigating the case. The DOJ has charged Capuci, who’s from Port St. Lucie, Florida, with conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit worldwide cash laundering. If discovered responsible, he faces a most sentence of 45 years.
In a overview of the cryptocurrency mining platform, crypto blogger Peter Obi famous that the mixture of MCC’s $50 month-to-month payment for membership and its steep 3% withdrawal payment meant that traders have been unlikely to make a revenue except they referred different traders. He identified that such a referral course of was “particularly worrying” as a result of it was according to different previous crypto scams.
Indeed, quite a few crypto leaders have been accused by authorities of working Ponzi schemes lately. Earlier this yr the DOJ indicted Bitconnect founder Satishkumar Kurjibhai Kumbhani for allegedly working a $2 billion Ponzi scheme — believed to be the biggest digital forex pyramid scheme in historical past.
Capuci by no means registered his firm with the SEC. The company as we speak issued a fraud alert for the corporate. According to the SEC press launch, Capuci and his associates efficiently satisfied 65,535 traders to buy mining packages worldwide and promised every day returns of 1 p.c, paid weekly for over a yr. In complete, the group netted $8.1 million from the sale of the mining packages and $3.2 million from initiation charges.