Mining Capital Coin CEO Indicted for Allegedly Running a Cryptocurrency Pyramid Scheme (cnn.com) 23
American's Justice Department announced Friday that the CEO of Mining Capital Coin, "a purported cryptocurrency mining and investment platform," has been indicted "for allegedly orchestrating a $62 million global investment fraud scheme."
CNN reports: According to a US Securities and Exchange Commission complaint filed last month, Capuci sold mining packages to more than 65,000 investors since at least January 2018. The group promised daily returns of 1% for up to a year, the SEC press release says. [Capuci apparently said that revenue stabilized the company's cryptocurrency, Capital Coin, according to the DOJ's sttement.] But instead, the DOJ alleges, Capuci diverted the funds to his own cryptocurrency wallets. MCC netted at least $8.1 million from the sale of the mining packages and $3.2 million in initiation fees, which funded a lavish lifestyle, including Lamborghinis, a yacht and real estate, according to the SEC complaint....
The release alleges another fraudulent MCC investment avenue, "Trading Bots," which Capuci claimed operated at "very high frequency, being able to do thousands of trades per second." Capuci claimed the Trading Bots would provide daily returns, according to the DOJ release. ["But instead was diverting the funds to himself and co-conspirators."] Capuci also allegedly ran a pyramid scheme, according to the DOJ, recruiting promoters to sell the mining packages and promising them gifts ranging from Apple watches to Capuci's personal Ferrari, the press release says. ["Capuci further concealed the location and control of the fraud proceeds obtained from investors by laundering the funds internationally through various foreign-based cryptocurrency exchanges."]
The DOJ charged Capuci with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. He could face up to 45 years in prison if convicted of all counts.
One U.S. attorney warned in the statement, "As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true."
The statement also argues that cryptocurrency-based fraud "undermines financial markets worldwide, as bad actors defraud investors, and limits the ability of legitimate entrepreneurs to innovate within this emerging space."
Thanks to Slashdot reader quonset for sharing the story!
CNN reports: According to a US Securities and Exchange Commission complaint filed last month, Capuci sold mining packages to more than 65,000 investors since at least January 2018. The group promised daily returns of 1% for up to a year, the SEC press release says. [Capuci apparently said that revenue stabilized the company's cryptocurrency, Capital Coin, according to the DOJ's sttement.] But instead, the DOJ alleges, Capuci diverted the funds to his own cryptocurrency wallets. MCC netted at least $8.1 million from the sale of the mining packages and $3.2 million in initiation fees, which funded a lavish lifestyle, including Lamborghinis, a yacht and real estate, according to the SEC complaint....
The release alleges another fraudulent MCC investment avenue, "Trading Bots," which Capuci claimed operated at "very high frequency, being able to do thousands of trades per second." Capuci claimed the Trading Bots would provide daily returns, according to the DOJ release. ["But instead was diverting the funds to himself and co-conspirators."] Capuci also allegedly ran a pyramid scheme, according to the DOJ, recruiting promoters to sell the mining packages and promising them gifts ranging from Apple watches to Capuci's personal Ferrari, the press release says. ["Capuci further concealed the location and control of the fraud proceeds obtained from investors by laundering the funds internationally through various foreign-based cryptocurrency exchanges."]
The DOJ charged Capuci with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. He could face up to 45 years in prison if convicted of all counts.
One U.S. attorney warned in the statement, "As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true."
The statement also argues that cryptocurrency-based fraud "undermines financial markets worldwide, as bad actors defraud investors, and limits the ability of legitimate entrepreneurs to innovate within this emerging space."
Thanks to Slashdot reader quonset for sharing the story!
Re: (Score:1)
The guy didn't pay enough to get "his" political candidates in office. Otherwise, none of this would have happened.
Don't worry. If Trump gets in office, he will get pardoned.
Re: (Score:1, Insightful)
The grand master plan of crypto (Score:2, Insightful)
The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.
After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.
But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and
Re: (Score:2)
I think that analysis is 20-20 hindsight. If you saw the bailout money, then you had every incentive to get into the regular banking system, not out it.
Re:What about banks? (Score:5, Interesting)
Banks cannot fail and get bailout money from governments but cryptocurrency is illegal because banks cannot control it. Anyone else see the double screw you to the little people here?
I wasn't aware cryptocurrency companies had FDIC or were so large that their collapse might cripple, or at least severely disrupt, a country's financial system. Perhaps you're comparing apples to oranges -- or banks to, basically, casinos.
Re: (Score:2)
He's a crook, and you're defending him? So, tell us - did you "invest" in his company, sucker, or are you working on a similar scheme?
Nooooo... (Score:5, Funny)
A cryptocurrency pyramid scheme where assholes take advantage of idiots attempting to get rich quick? That would NEVER happen.
Re:Nooooo... (Score:4, Funny)
Let me assure you that this is not one of those shady pyramid schemes you've been hearing about. No sir. Our model is the trapezoid!
Krypto Krime Koins (Score:2, Insightful)
Comment removed (Score:3)
Re: (Score:2)
does seem redundant
That's funny (Score:5, Insightful)
I thought it was understood that all crypto was a pyramid scheme. Don't know why they would go after just one person
Re:That's funny (Score:5, Funny)
I thought it was understood that all crypto was a pyramid scheme. Don't know why they would go after just one person
Whoa, whoa, whoa. Hold on there. Not all crypto is a pyramid scheme [9cache.com].
Re: (Score:2)
You are right, there are stable coins
Re: (Score:2)
I think this is a case where the term pyramid scheme is becoming a generic term for all fraud. Most crypto is fraud, but very little of it is pyramid scheme with multiple levels. You do see some pump-and-dump as well as a bit of ponzi, but most crypto schemes are pure and undiluted fraud without those other complications.
Mining packages (Score:5, Informative)
There are plenty of companies that sell "mining services". They set up hardware to do the hashing for you and they skim some of the take and give the rest to you. You lay out the cash to get the ball rolling.
These guys sold "mining packages" and promised unrealistic returns. They did not deliver. Pretty cut-and-dry. They could just have easily been running a similar scam involving other forms of investments.
"Allegedly" (Score:2)
In other news today, water is allegedly wet.
Innocence Thru Redefinition (Score:3)
I'm waiting for the transcripts of his deposition where he claims his company isn't a Ponzi scheme and then gives a description of what his company does that will later be used in law school text as a platonic ideal of a Ponzi scheme.