SEC Busts $62 Million Crypto Mining and Trading Fraud Scheme

The US Securities and Exchange Commission (SEC) has halted a fraudulent crypto mining and trading scheme, charging MCC International (aka Mining Capital Coin), its founders (Luiz Carlos Capuci Jr. and Emerson Souza Pires), and two entities controlled by them.

The agency noted that MCC fraudlently sold investment plans called mining packages to thousands of investors.

According to the securities watchdog, since at least January 2018, “MCC, Capuci, and Pires sold mining packages to 65,535 investors worldwide and promised daily returns of 1 percent, paid weekly, for a period of up to 52 weeks.”

The complaint also alleges that MCC investors were initially promised returns in bitcoin (BTC).

However, the defendants later “required investors to withdraw their investments in tokens called capital coin (CPTL), which was MCC’s own token.”

In another development, the U.S. Department of Justice also independently announced that Capuci, the founder and CEO of MCC, a purported cryptocurrency mining and investment platform, has been indicted in a $62 million global cryptocurrency fraud scheme.

The DOJ said Capuci of Port St. Lucie, Florida, misled investors about his platform’s cryptocurrency mining and investment program, luring them to invest in MCC’s “mining packages.”

He and his co-conspirators claimed that MCC had an international network of cryptocurrency mining machines that could generate “substantial profits and guaranteed returns” for investors.

The DOJ further stated that Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control.

The indictment further alleges that Capuci touted and fraudulently marketed MCC’s purported “trading bots” as an additional investment mechanism to help investors profit in the cryptocurrency market.

The MCC founder also allegedly recruited promoters and affiliates to promote MCC in a pyramid scheme, the DOJ said, adding that he further concealed the location and control of the fraud proceeds by laundering the funds through various foreign-based cryptocurrency exchanges.

The DOJ is charging Capuci with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering.

If convicted of all counts, he faces a maximum total penalty of 45 years in prison.