Mining Capital Coin CEO Has Been Accused of a $62M Cryptocurrency Fraud Scheme

Mining Capital Coin CEO Has Been Accused of a $62M Cryptocurrency Fraud Scheme

Capuci persuaded investors to buy “Mining Packages,” a global network of bitcoin miners that promised a weekly return on investment through his company. Instead of mining cryptocurrencies with investor funds as promised, the DOJ claims Capuci diverted the funds to his own cryptocurrency wallets.

The DOJ accused Mining Capital Coin CEO and founder Luiz Capuci Jr. of orchestrating a $62 million global investment fraud conspiracy in an indictment released yesterday. He’s the most recent of numerous crypto business executives to face similar charges.

Another MCC product known as “Trading Bots” operated under the same false pretenses. Capuci claimed that the bots operated in “very high frequency, being able to do thousands of trades per second” and promised investors daily 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 seemed to have all the workings of a pyramid scheme. Capuci recruited affiliates and promoters to lure investors. In return, he promised the promoters a number of lavish gifts, including Apple watches, iPads and luxury vehicles.

Currently the FBI’s Miami Field Office is investigating the case. The DOJ has charged Capuci, who is from Port St. Lucie, Florida, with conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit international money laundering. If found guilty, he faces a maximum sentence of 45 years.

In a review of the cryptocurrency mining platform, crypto blogger Peter Obi noted that the combination of MCC’s $50 monthly fee for membership and its steep 3% withdrawal fee meant that investors were unlikely to make a profit unless they referred other investors. He pointed out that such a referral process was “particularly worrying” because it was consistent with other past crypto scams.

Indeed, a number of crypto leaders have been accused by authorities of running Ponzi schemes in recent years. Earlier this year the DOJ indicted Bitconnect founder Satishkumar Kurjibhai Kumbhani for allegedly running a $2 billion Ponzi scheme — believed to be the largest virtual currency pyramid scheme in history.

Capuci never registered his company with the SEC. The agency today issued a fraud alert for the company. According to the SEC press release, Capuci and his associates successfully convinced 65,535 investors to purchase mining packages worldwide and promised daily returns of one percent, paid weekly for over a year. In total, the group netted $8.1 million from the sale of the mining packages and $3.2 million from initiation fees.

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