The U.S. Securities and Exchange Commission (SEC) is stepping up its actions against the crypto industry. They recently filed charges against Touzi Capital and its founder, Eng Taing.

The SEC claims that Touzi Capital was involved in a fraud scheme exceeding $100 million. This included selling unregistered securities and misusing investor funds.

According to the SEC, over 1,500 investors across the U.S. were defrauded. Between 2021 and early 2023, the firm raised $95 million for crypto mining projects and $23 million for debt recovery efforts.

However, the SEC alleges that these funds were misused. They say the money was mixed across unrelated businesses for Taing’s personal benefit.

The Commission stated, “The defendants commingled investor funds among its various businesses, some of which had nothing to do with crypto asset mining.” They also claimed Taing misled investors about how profitable the businesses really were.

Touzi Capital marketed its offerings as safe, high-yield investments, similar to savings accounts. But the SEC argues these investments were speculative and relied on risky third-party operations.

Furthermore, the SEC pointed out that claims about Touzi Capital’s Bitcoin mining business were misleading. They promised profits through low-cost energy contracts and advanced mining equipment. Yet, fluctuating energy costs and equipment issues undermined those promises.

In reality, the SEC said, “Touzi Capital’s ‘breakeven’ point for mining bitcoin was misleading.” They noted that the calculations ignored known factors. Energy costs varied greatly, and the company faced ongoing equipment problems.

Reports indicate that Touzi Capital's operations have collapsed, leaving investors without information due to Taing’s lack of communication. As a result, the SEC is seeking permanent injunctions, civil penalties, and the return of ill-gotten gains. They also want to bar Taing from serving as an officer or director in any company.

This legal action is part of the SEC's broader enforcement efforts under Chair Gary Gensler, who plans to step down in January. In fiscal year 2024, the SEC filed 583 enforcement cases and collected a record $8.2 billion in penalties and remedies. Notably, high-profile crypto cases, like the $4.5 billion settlement with Terraform Labs, accounted for over half of the year’s financial recoveries.