According to the SEC, Touzi Capital stated investor funds would finance crypto mining operations, but they were used for unrelated expenses instead.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Eng Taing and his company, Touzi Capital LLC, alleging they misled over 1,200 investors in unregistered securities offerings worth over $100 million.
The SEC claims that between 2021 and 2023, the company raised $95 million through offerings purportedly aimed at funding crypto-asset mining operations. However, Touzi Capital allegedly commingled investor funds, used some for unrelated business ventures and even diverted money for personal use.
The investment firm specializing in alternative investments also reportedly raised nearly $23 million for its debt rehabilitation business, but is accused of improperly commingling these funds with money allocated to its crypto-asset mining operations and other unrelated business ventures. This alleged mismanagement blurred the lines between distinct investment streams, undermining transparency and misrepresenting the use of investor capital.
The SEC also alleges that Touzi Capital made misleading claims about their mining operations, promising high returns based on supposedly low costs and fixed energy contracts. In reality, their energy expenses were volatile, and they faced consistent equipment failures. Moreover, Touzi allegedly marketed risky, illiquid debt rehabilitation investments as if they were stable, high-yield alternatives similar to money market funds.
According to additional media reports, when third-party companies defaulted on obligations to Touzi, Taing allegedly withheld this information from investors for nine months.
The SEC is seeking a permanent injunction, financial penalties, disgorgement of profits, and a ban on Taing serving as an officer or director in any future ventures, in connection to this case.
Touzi Capital, LLC, is a California-based investment firm founded and controlled by Eng Taing. The company has marketed itself as specializing in real estate investments, debt rehabilitation, and funding crypto-asset mining operations. The company itself and the numerous businesses it operated “now appear to have collapsed,” according to the SEC complaint, while about $14 million worth of Bitcoin holdings are still in digital wallets under the firm’s control.
