SEC v. Eng Taing; and Touzi Capital, LLC, No. 3:24-CV-02179, Southern District of California (Nov. 29, 2024) — Complaint

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JASMINE M. STARR (Cal. Bar No. 259473)
Email:  [email protected]
PETER F. DEL GRECO (Cal. Bar No. 164925)
Email:  [email protected]

Attorneys for Plaintiff
Securities and Exchange Commission
Katharine E. Zoladz, Regional Director
Gary Y. Leung, Associate Regional Director
Douglas M. Miller, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: (323) 965-3998
Facsimile: (213) 443-1904
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
ENG TAING AND TOUZI CAPITAL,
LLC,
Defendants.
    Case No.
COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiff Securities and Exchange Commission (“SEC”) alleges:
SUMMARY
1. This civil enforcement action concerns a $115 million securities offering
fraud by Defendant Eng Taing (“Taing”) and the entity he controls, Defendant Touzi
Capital, LLC (“Touzi Capital”).  When pitching these investments from 2020 to
2023, defendants led investors to believe their investment funds would either be used
to finance debt rehabilitation businesses or crypto asset mining businesses that Taing
managed through Touzi Capital.
2. Although Defendants did use investor funds to engage in these business
'24CV2179VETCAB

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ventures, Taing and Touzi Capital commingled investor monies, using funds intended
for one Touzi Capital entity to meet the needs of another Touzi Capital entity.  This
commingling violated representations Defendants made to investors that their funds
would be used for the specific business they had invested in.
3. In addition, Touzi Capital and Taing enticed investors with materially
false and/or misleading statements about their business operations, claiming their
debt rehabilitation offerings were stable and liquid investments similar to high-yield
money market funds.  In reality, these were risky, illiquid investments that entirely
depended on the performance of third-party companies.  When these third-party
companies defaulted on their obligations to Touzi Capital, Defendants hid this from
investors for at least nine months while they continued to offer and sell securities to
new and continuing investors.
4. Touzi Capital and Taing similarly misled investors in their crypto-asset
mining business by marketing it as an investment that could profitably mine bitcoin at
prices far below bitcoin’s prevailing market price.  They claimed they could
profitably mine through low-cost, fixed term energy contracts and by using high
quality mining equipment.  In reality, Touzi Capital’s “breakeven” point for mining
bitcoin was misleading, because the way this was calculated excluded known factors.
Moreover, the energy costs for Touzi Capital’s crypto-asset mining businesses
fluctuated greatly, and it consistently had problems with its equipment.
5. Touzi Capital and the businesses it oversaw now appear to have
collapsed.  Touzi Capital’s investors have not been able to get answers from the
company or from Taing and, according to several investors, he has stopped
communicating with them.
6. Taing controls all of the bank accounts of Touzi Capital and its affiliates,
and additionally appears to retain control over investor assets in the form of several
virtual wallets that may hold more than $14 million worth of bitcoin.
7. By engaging in this conduct, Defendants violated the registration and

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antifraud provisions of Sections 5 and 17(a) of the Securities Act and Section 10(b) of
the Exchange Act and Rule 10b-5 thereunder.
8. Accordingly, the SEC seeks permanent injunctions, disgorgement of ill-
gotten gains, along with pre-judgment interest, civil penalties against Defendants
Taing and Touzi Capital, and an officer and director bar against Defendant Taing.
JURISDICTION AND VENUE
9. The Court has jurisdiction over this action pursuant to Sections 20(b),
20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§
77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the
Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1),
78u(d)(3)(A), 78u(e) & 78aa(a).
10. Defendants have, directly or indirectly, made use of the means or
instrumentalities of interstate commerce, of the mails, or of the facilities of a national
securities exchange in connection with the transactions, acts, practices and courses of
business alleged in this complaint.
11. Venue is proper in this district pursuant to Section 22(a) of the Securities
Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a),
because certain of the transactions, acts, practices and courses of conduct constituting
violations of the federal securities laws occurred within this district.  In addition,
venue is proper in this district because Defendant Eng Taing resides in this district,
and because Defendant Touzi Capital, LLC has its principal place of business in this
district.
DEFENDANTS
12. Eng Taing, age 39, is a resident of San Marcos, California.  Taing is the
sole member of Touzi Capital, LLC.
13. Touzi Capital, LLC, is a California limited liability company located in
San Marcos, California.
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RELATED ENTITIES
A. PECC Entities
14. PECC Fund I LLC is a Delaware limited liability company managed
by Defendant Taing.
15. PECC Fund II LLC on information and belief is a fictitious business
name used by Taing and Touzi Capital.
16. PECC Fund III LLC is a Delaware limited liability company managed
by Defendants Taing and Touzi Capital.
17. PECC Corp. is a Delaware corporation controlled by Taing and Touzi
Capital.
B. BTC Fund I Entities
18. Teracel Blockchain Fund LLC is a Delaware limited liability company
managed by Touzi Capital.
19. Teracel I LLC is a Delaware limited liability company managed by
Touzi Capital.
C. BTC Fund II Entities
20. Teracel Blockchain Fund II LLC is a Delaware limited liability
company managed by Touzi Capital.
21. Teracel II LLC is a Delaware limited liability company managed by
Touzi Capital.
D. BTC Fund III Entities
22. Touzi Data Tech LLC is a Delaware limited liability company
managed by Touzi Capital.
23. Touzi Data Technology LLC is a Delaware limited liability company
managed by Touzi Capital.
24. Touzi Tech LLC is a Delaware limited liability company managed by
Touzi Capital.
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E. BTC Fund IV Entities
25. Touzi Mine Invest LLC is a Wyoming limited liability company
managed by Touzi Capital.
26. Touzi Mining Invest LLC is a Wyoming limited liability company
managed by Touzi Capital.
27. Touzi Mining Inv LLC is a Wyoming limited liability company
managed by Touzi Capital.
28. Touzi Mining Inv II LLC is a Wyoming limited liability company
managed by Touzi Capital.
29. Touzi Mining Invest II, LLC is a Wyoming limited liability company
managed by Touzi Capital.
30. Touzi Mining LLC is a Wyoming limited liability company managed
by Touzi Capital.
F. BTC Fund V Entities
31. Touzi DC Invest LLC is a Wyoming limited liability company
managed by Touzi Capital.
32. Touzi Data Center Invest LLC is a Wyoming limited liability
company managed by Touzi Capital.
33. Touzi Data Center Inv LLC is a Wyoming limited liability company
managed by Touzi Capital.
34. Touzi Data Center, LLC is a Wyoming limited liability company
managed by Touzi Capital.
G. BTC Fund VI Entities
35. Touzi Gem Inv, LLC is a Wyoming limited liability company managed
by Touzi Capital.
36. Touzi Gem Mining Inv LLC is a Wyoming limited liability company
managed by Touzi Capital
.
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FACTUAL ALLEGATIONS
A. Touzi’s Formation and Offerings
37. In 2020, Taing formed Touzi Capital.
38. At all times since Touzi Capital’s formation, Taing has been the sole
managing member of Touzi Capital.
39. At all times since Touzi Capital’s formation, Taing has controlled Touzi
Capital and its day-to-day operations.
40. At all times since Touzi Capital’s formation, Taing has controlled Touzi
Capital’s bank accounts and crypto asset wallets.
41. In 2020, Taing and Touzi Capital began offering investors equity
interests in funds that were formed to fund the businesses that Taing managed
through Touzi Capital.
42. Defendants’ initial investors consisted largely of former co-workers, but
the number of investors expanded as Defendants solicited investors more broadly.
43. Touzi Capital solicited investors for its offerings via webinar
presentations hosted by Taing, podcasts on which Taing was a guest, and online
investor forums on Reddit and elsewhere.
44. Touzi Capital maintained an online portal open to the public where it
made available its PPMs, power points, and other offering materials and provided
interested investors with wiring instructions.
45. Between 2020 and 2024, Taing managed more than two dozen
businesses, most of which fell within four broad areas: crypto asset mining, debt
rehabilitation, the construction of assisted-living facilities, and the development of
commercial real estate.
46. By 2022, Taing claimed to manage more than $350 million of investor
funds through Touzi Capital’s various business interests.
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B. The Touzi Capital PECC Offerings
1. Defendants Raised Over $22 Million for Touzi Capital’s
Distressed Debt Businesses
47. In or around December 2020, Defendants began raising money for what
they called “Private Equity Consumer Credit” funds (the “PECC Funds”).  They
represented that after receiving investor capital, the funds would in turn invest fund
assets in PECC Corp. (“PECC”), an operating company controlled by Taing and
Touzi Capital.  According to defendants, PECC then invested in businesses that
purportedly provided legal services to consumers in exchange for a monthly fee.  The
legal services supposedly were designed to reduce the debt that the consumers owed.
48. According to the terms of the PECC Fund subscription agreements,
PECC would use investor monies to “exclusively” purchase “receivables,” defined as
certain payment obligations under consumer contracts.  Taing told investors that
PECC would purchase these receivables from a law firm working on debt
rehabilitation, but he did not identify the name of the firm.
49. As represented by Taing, PECC acquired the accounts of persons with
significant amounts of debt, some or all of which could be invalidated through legal
processes conducted by Litigation Practice Group (“LPG”). The debtor paid a service
fee for the debt invalidation, with 40% going to LPG and with PECC receiving 60%
of the fees.  PECC purchased this right to receive fees from an entity called
Validation Partners LLC (“Validation Partners”).  PECC claimed that it typically
acquired the accounts for $2,000 apiece and received $8,000 in program fees paid by
the debtors over the course of 24 to 36 months.
50. Taing and Touzi Capital raised money for PECC through three offering
entities (“the PECC Funds”).
51. Taing and Touzi Capital also raised money for PECC through the sale of
promissory notes (“the PECC Notes”).
52. There were approximately 283 investors in the PECC Funds and Notes.

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53. Investors in multiple states purchased securities in the PECC Fund and
Note offerings.
54. Between December 2020 and March 2023, Taing and Touzi Capital
raised over $22 million through the PECC Fund and Note offerings.
55. Touzi Capital was the manager of each of the PECC Fund offering
entities, and Taing was the manager of Touzi Capital.
a. PECC Fund I
56. In the PECC Fund I offering, Defendants offered securities in the form
of membership interests in PECC Fund I LLC.  These membership interests, also
called LLC units, were not registered with the SEC.

57. Taing and Touzi Capital raised approximately $6.23 million from about
120 investors through the PECC Fund I offering from December 2020 through
August 2022.
58. Investors in PECC Fund I were promised distributions of 12 percent per
year and the return of their full invested capital after one year.

59. The PECC Fund I offering documents stated that investor funds would
be used “to purchase preferred stock of PECC Corp, which will in turn be used to
purchase Receivables exclusively.”
60. On August 18, 2021, PECC Fund I LLC filed an SEC Form D, Notice of
Exempt Offering (“Form D”), for an offering of equity securities, claiming that its
first sale was August 5, 2021, and that it had already raised $3,400,000.
b. PECC Fund II
61. In the PECC Fund II offering, Defendants offered securities in the form
of membership interests in PECC Fund II LLC.  These membership interests, also
called LLC units, were not registered with the SEC.

62. Taing and Touzi Capital raised approximately $3.88 million through the
PECC Fund II offering from March 2021through August 2022.
63. In documents provided to investors, Defendants represented that PECC

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Fund II was a Delaware limited liability company, managed by Defendant Taing, and
formed for the purpose of raising funds for PECC Corp.
64. The Division of Corporations of the State of Delaware does not list any
entity on their business registry called PECC Fund II LLC.  “PECC Fund II LLC”
therefore appears to be a fictitious name used by Taing and Touzi Capital.
65. Investors in PECC Fund II were promised distributions of 12 percent per
year and the return of their full invested capital after one year.

66. The PECC Fund II offering documents stated that investor funds would
be used “to purchase preferred stock of PECC Corp, which will in turn be used to
purchase Receivables exclusively.”
67. No Form D was filed for the PECC Fund II offering.
c. PECC Fund III
68. In the PECC Fund III offering, Defendants offered securities in the form
of membership interests in PECC Fund III LLC.  These membership interests, also
called LLC units, were not registered with the SEC.

69. Taing and Touzi Capital raised approximately $4.61 million in PECC
Fund III from April 2021 through November 2022.
70. Investors in PECC Fund III were promised distributions of 10 percent
per year and the return of their full invested capital after one year.

71. The PECC Fund III offering documents stated that investor funds would
be used “to purchase preferred stock of PECC Corp, which will in turn be used to
purchase Receivables exclusively.”

72. No Form D was filed for the PECC Fund II offering.
d. PECC Notes and Unidentified Investments
73. In addition to the PECC Fund equity offerings, Defendants also raised
money for PECC by issuing promissory notes (“PECC Notes”).
74. The PECC Notes were issued by PECC Corp. and promised investors a
14 percent return and the return of their capital after one year.

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75. From December 2020 to March 2023, Touzi Capital entities received
over $8.14 million in what appear to be investor funds related to PECC Funds or
PECC Notes based on notes on the check or wire, the name of the account into which
the funds were deposited, or other evidence.
76. The following table summarizes the approximate number of investors
and the approximate amount of funds raised in the Touzi Capital BTC Fund
Offerings:
Offerin
g Number of Investors Amount Raised
PECC Fund I 120 $6,232,376
PECC Fund II 50 $3,877,000
PECC Fund III 47 $4,608,588
PECC Notes or Unclear                        66                        $8,143,399
TOTAL PECC 283                                $22,861,363
2. Defendants Made False and Misleading Statements to
Investors in PECC
77. As presented to investors, the main appeal of an investment in the PECC
Funds and PECC Notes was their guaranteed monthly distributions and their
purported liquidity.
78. In marketing the PECC Funds, Defendants represented to investors that
the Funds were “very stable and predictable” and that due to their “highly liquid
nature” could be treated as “an alternative to a high-yield savings account.”
79. Taing repeatedly stressed the liquidity of an investment in PECC, telling
one investor by email that the PECC Fund III would have “predictable monthly cash
flow and liquidity.”
80. These representations about the liquidity and relative safety of the PECC
Funds were material and important to investors in their decision to invest with Touzi
Capital and Taing.
81. Defendants marketed the PECC Notes similarly, offering them as an
alternative to the PECC Funds and claiming that the only difference was that the

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Notes were taxable and thus better suited for investors with a tax-advantaged IRA.
82. The statements Taing made to investors regarding the PECC Funds and
PECC Notes being liquid and relatively safe investments were materially false and
misleading for the reasons alleged below.
83. The PECC Funds and Notes were highly speculative and illiquid because
the ability of the PECC Funds and Notes to pay investors the promised returns or
provide liquidity was entirely dependent on a chain of intermediaries.  The
receivables PECC supposedly acquired were the stream of payments that LPG’s
clients were supposed to pay for debt rehabilitation services, which LPG would pay
to Validation Partners who would in turn pay PECC.  But at every link in that chain
between LPG’s clients and PECC were significant risks that were not adequately
disclosed to investors.  The consumers who had agreed to pay LPG a monthly fee had
hired LPG to invalidate or negotiate settlements of their outstanding debts and thus
there was a risk they would not make payment on the debts they owed LPG.
84. Investors in the PECC Funds were also exposed to a wide range of
undisclosed risks beyond the risk that the underlying LPG clients would not make
their contracted payments, including the risk that LPG would not transfer payments to
Validation Partners, the risk that Validation Partners would not transfer the payment
to PECC, the risk of fraud by Validation Partners or LPG, and the risk that LPG was
operating illegally and violating consumer protection laws, including a law that
prohibits for-profit companies that sell debt rehabilitation services over the telephone
from charging a fee before they actually settle or reduce a consumer’s debt.
85. Because Defendants did not adequately disclose these risks to investors,
Defendants’ statements regarding the PECC Funds and PECC Notes being liquid and
relatively safe investments were materially misleading.
86. Taing knew, or was reckless and negligent for not knowing, about these
risks because he controlled PECC Corp. and was the manager of all the PECC
offering entities.  Taing understood the business model of LPG and Validation

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Partners and even at one point owned a similar company.
87. In addition, Taing knew, or was reckless and negligent for not knowing,
that these risks were materializing from as early as July 2022, when Validation
Partners alerted PECC that it would stop making distributions to PECC, yet he
continued to represent to investors that the PECC Funds were liquid and relatively
safe investment.
88. When LPG was falling behind on its payments, Taing insisted that Touzi
Capital project confidence in an effort to control the situation.  When a Touzi Capital
employee suggested to Taing that he close the PECC fund to new investors, Taing
refused.
89. Instead, from August 2022 to March 2023, Defendants persuaded
existing investors to re-invest in the PECC Funds without disclosing the risks and
problems with Validation Partners and LPG.
90. For example, on October 26, 2022, Taing emailed a PECC Fund II
investor (KF) whose investment was maturing in November 2022 and provided her
assurances that convinced her to re-invest in PECC when her existing investments
matured in November 2022 and January 2023.  Taing did not disclose the problems
with Validation Partners that had come to his attention at least by July 2022.  Had the
investor known about these problems, she would not have re-invested.
91. On March 20, 2023, LPG filed for bankruptcy.  The receivables PECC
acquired from LPG appear to have no current value.  PECC paid $22,962,250 for the
purchase of debtor files but only received $14,342,508 in revenue, for a net loss of
$8,619,742.
92. In or around April 2023, PECC ceased making the monthly payments to
investors in the PECC Funds and Note investors and ceased honoring liquidation
requests.
93. It was not until May 2023 that Taing told investors that Touzi Capital
had, starting in July 2022, experienced payment problems on the PECC funds.

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3. Taing Was the Maker of These False and Misleading
Statements
94. Taing was the maker of the materially false and misleading statements
regarding the PECC Funds and PECC Notes because he was the managing member
and control person of Touzi Capital, and the person who disseminated information
about the PECC Funds and PECC Notes to the public.
95. Taing spoke to prospective PECC investors through online seminars
(also known as webinars) that he hosted.  For example, one investor (JG) who
attended webinars at which Taing spoke understood the PECC funds to provide
guaranteed returns and liquidity.
96. Taing answered questions from prospective investors directly through
Slack, a digital messaging system.
97. Taing spoke to prospective investors by videoconferencing systems such
as Zoom.  One investor (AJ) who had several communications with Taing on Zoom
recalled Taing telling him that investing in a PECC Fund would be like investing in a
high-yield savings account and stressing its liquidity.
98. Taing directed prospective investors to an online portal maintained by
Touzi Capital that contained promotional materials, including PowerPoints, for
various Touzi investment opportunities.
99. Accordingly, Taing had ultimate authority over the statements regarding
the PECC Funds and PECC Notes, including their content and whether and how to
communicate those statements to investors and potential investors in the PECC Funds
and PECC Notes.
4. Defendants Commingled Funds from Investors in the PECC
Funds and Notes with Funds from Unrelated Businesses
100. The offering documents for the PECC Funds, and by extension the Notes
that were marketed as a similar alternative to the PECC Funds, represented that
investor funds would be invested in PECC Corp., which in turn would use the funds

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to purchase payment obligations under consumer contracts.
101. In reality, Defendants did not segregate the investors funds they received
for the PECC Funds or invest them exclusively in PECC Corp., but instead
commingled those monies with other monies invested in unrelated Touzi Capital
entities.
102. In total, PECC Fund accounts transferred a net amount of about
$7,585,600 to Touzi Capital accounts.
103. PECC Fund accounts also made transfers to other Touzi Capital
businesses.  For example, on June 1, 2022, Defendants transferred approximately
$1,000,500 from a PECC bank account ending in x1352 to an account for an
unrelated Touzi Capital business ending in x2836.  That business then used the funds
to pay about $920,000 in construction-related bills that were unrelated to PECC’s
business.
104. Then, on June 6 and 7, 2022, Defendants transferred a total of
approximately $3,000,000 from a PECC Fund account ending in x1352 to a Touzi
Capital account ending in x2800, which then paid about $1,038,455 in mining fees
for Touzi’s crypto asset mining business that were unrelated to PECC’s business.
Without the transfers from the PECC Fund account, the Touzi Capital account ending
in x2800 would have not had sufficient funds to pay the mining fees.
105. In total, PECC Fund accounts paid approximately $1,592,500 to
unrelated Touzi businesses, not including the amounts that were sent directly to Touzi
Capital.  Although the PECC Fund accounts received transfers of approximately
$6,546,741 from unrelated Touzi businesses, investor funds were not supposed to be
commingled in this way, and that commingling was contrary to what Defendants
represented to investors in the PPMs.
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5. Defendants Offered and Sold Unregistered Securities in the
PECC Notes and Funds Offerings
a. The PECC Fund Units Are Securities
106. Defendants offered and sold equity securities in the PECC Funds in the
form of units in the offering entity LLC.
107. The LLC units represented an ownership interest in the offering
company.
108. Each investor’s ownership percentage was equal to the percentage of
units they held out of the total units.
109. Investors in the PECC Funds purchased the securities by providing
money to Touzi Capital or the offering entity.
110. Investor money was supposed to be pooled together and invested in
PECC Corp., which in turn was supposed to use the pooled investor money to
purchase receivables.
111. Profits from PECC Corp. were supposed to be shared with investors
through the promised distributions.
112. Investor’s ability to profit was dependent on Taing and Touzi Capital’s
ability to successfully operate PECC Corp.
113. Investors in the PECC Funds did not exercise any control or
management over the LLCs, each of which was solely managed by Touzi Capital and
controlled by Taing.
114. Defendants sold securities in the PECC Funds to at least 217 investors
located in in California, Idaho, New York, and other states.
b. The PECC Notes Are Securities
115.  The PECC Notes offered and sold by Defendants are also securities.
116. Investors in the PECC Notes purchased the promissory notes by
providing money to Touzi Capital or PECC.
117. The PECC Notes promised investors returns of 14 percent per year,

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which far exceeded the rates available on traditional and more conservative
retirement investments such as CDs or money market accounts.
118. Defendants claimed they would use the monies raised from investors to
finance the operating expenses of PECC Corp.
119. Defendants marketed, offered and sold the notes to a broad segment of
the public.
120. A reasonable member of the investing public would consider the notes to
be securities, as they viewed the notes as an investment given how Defendants
marketed them as high-return opportunities for investors.
121. There is no alternate regulatory scheme for the PECC Notes.
122. Profits from PECC Corp. were supposed to be shared with note investors
through the promised returns.
123. Investor’s ability to profit was dependent on Taing and Touzi Capital’s
ability to successfully operate the debt rehabilitation business.
124. Investors in the PECC Notes did not exercise any control or management
over PECC Corp.
c. The PECC Fund and Note Securities Were Unregistered
and Not Subject to an Exemption from Registration
125. None of the PECC Fund or PECC Note offerings were registered with
the SEC.
126. None of the PECC Fund or PECC Note offerings were subject to a valid
exemption from registration.
127. Taing and Touzi Capital engaged in general solicitation of investors for
the PECC Fund and PECC Note offerings.
128. Taing spoke to prospective investors through online seminars (also
known as webinars) that he hosted.
129. Taing answered questions from prospective investors directly through
Slack, a digital messaging system.

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130. Taing spoke to prospective investors by videoconferencing systems such
as Zoom.
131. Taing directed prospective investors to an online portal maintained by
Touzi Capital that contained promotional materials, including PowerPoints, for
various Touzi investment opportunities.
132. Defendants did not provide investors with audited financial statements
for the PECC Fund and PECC Note offerings.
133. Touzi Capital had potential investors in the PECC Fund and PECC Note
offerings indicate whether they were accredited, but did nothing to verify the
assertions of those who claimed to be accredited investors.
134.  Touzi Capital did not assess the sophistication of prospective investors
who disclosed that they were not accredited.
C. The Touzi BTC Funds
1. Defendants Raised Over $94 Million for Touzi Capital’s
Crypto Asset Mining Businesses
135. Touzi Capital also offered investors the opportunity to invest in funds
that claimed investor funds would be used to mine bitcoin and other crypto assets (the
“BTC Funds”).
136. Taing and Touzi Capital raised approximately $94 million from
investors for the Touzi BTC Funds.
137. There were roughly 1,573 investors in the BTC Funds located in
California, New York, Texas, and other states.
138. The Touzi BTC Funds consisted of 6 groups of funds.  Each group
consisted of one or more offering entities that purported to invest in an operating
entity engaged in the business of crypto asset mining.
139. Touzi Capital was the manager of each of the BTC Fund offering
entities, and Taing was the manager of Touzi Capital.
140. Although the purpose of each of the BTC Funds was to finance crypto

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asset mining activities, they purported to raise money for different operating entities,
which were supposed to acquire mining equipment and pay returns based on the
performance of those miners.
a. BTC Fund I
141. The first fund (“BTC Fund I”) consisted of one offering entity, Teracel
Blockchain Fund, LLC, whose proceeds were supposed to be invested in one
operating entity, Teracel I LLC.
142. Taing and Touzi Capital raised approximately $3.47 million from about
92 investors located in California, New York, Texas, Georgia, and other states
through the BTC Fund I offering from March through September 2021.
143. According to an investor presentation for BTC Fund I, investor funds
would be used to acquire mining equipment in March 2021 and begin mining in the
second quarter of 2021 at a facility in Kearney, Nebraska.
144. Investors in BTC Fund I received securities in the form of limited
liability interests in Teracel Blockchain Fund, LLC.
145. On May 20, 2021, Teracel Blockchain Fund, LLC filed a Form D for a
$5 million offering of equity securities, which was signed by Taing.  The filing
claimed that its first sale was March 8, 2021, and that it had already raised
$4,145,000.
b. BTC Fund II
146. The second fund (“BTC Fund II”) consisted of one offering entity,
Teracel Blockchain Fund II, LLC, whose proceeds were supposed to be invested in
one operating entity, Teracel II LLC.
147. Taing and Touzi Capital raised approximately $3.25 million from about
110 investors located in California, Texas, New Jersey, and other states through the
BTC Fund II offering from June through September 2021.
148. According to an investor presentation for BTC Fund II, investor funds
would be used to acquire 500 miners in June 2021 and be setup by September 2021 at

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facilities in Kearney, Nebraska, and Big Springs, Texas.
149. Investors in BTC Fund II received securities in the form of limited
liability interests in Teracel Blockchain Fund II, LLC.
150. On August 18, 2021, Teracel Blockchain Fund II, LLC filed a Form D
for a $5 million offering of equity securities.  The filing claimed that its first sale was
August 4, 2021, and that it had already raised $5,000,000.
c. BTC Fund III
151. The third fund (“BTC Fund III”) consisted of two offering entities,
Touzi Data Tech, LLC and Touzi Data Technology, LLC,

 whose proceeds were
supposed to be invested in one operating entity, Touzi Tech LLC.
152. Taing and Touzi Capital raised approximately $11.79 million from about
284 investors located in California, Texas, Florida, and other states through the BTC
Fund III offering from April 2021 through March 2022.
153. According to an investor presentation for BTC Fund III, it would acquire
1,000 miners in August 2021 that would be setup by December 2021 at facilities in
Pueblo, Colorado.
154. Investors in BTC Fund III received securities in the form of limited
liability interests in Touzi Data Tech, LLC or Touzi Data Technology, LLC.

155. Touzi Data Tech, LLC did not file a Form D but claimed in its offering
documents that it was conducting a $10 million offering.
156. On August 8, 2022, Touzi Data Technology, LLC filed a Form D for a
$10 million offering of equity securities, claiming that its first sale was November 8,
2021, and that it had already raised $3,236,100.
d. BTC Fund IV
157. The fourth fund (“BTC Fund IV”) consisted of five offering entities,
Touzi Mine Invest, LLC, Touzi Mining Invest, LLC, Touzi Mining Inv, LLC, Touzi
Mining Inv II, LLC, and Touzi Mining Invest II, LLC, whose proceeds were
supposed to be invested in one operating entity, Touzi Mining LLC.

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158. Taing and Touzi Capital raised approximately $32.89 million from about
597 investors located in California, New York, Texas, and other states through the
BTC Fund IV offering from November 2021 through June 2022.
159. According to an investor presentation for BTC Fund IV, it would acquire
miners in February 2022 and begin mining by May 2022 at facilities in Sandusky,
Ohio.
160. Investors in BTC Fund IV received securities in the form of limited
liability interests in one of the five offering entities.
161. Touzi Mining Invest II, LLC filed a Form D on July 15, 2022, for a $40
million offering of equity securities, claiming that its first sale was May 3, 2022, and
that it had already raised $11,351,000.  None of the other offering entities in BTC
Fund IV filed a Form D.
e. BTC Fund V
162. The fifth fund (“BTC Fund V”) consisted of three offering entities,
Touzi DC Invest, LLC, Touzi Data Center Invest, LLC, and Touzi Data Center Inv
LLC, whose proceeds were supposed to be invested in one operating entity, Touzi
Data Center, LLC.
163. Taing and Touzi Capital raised approximately $15.14 million from about
75 investors located in California, Illinois, Florida, and other states through the BTC
Fund V offering from March through June 2022.
164. The PPMs for BTC Fund V stated that Touzi Data Center LLC would
use the funds raised “to acquire and lease the data center rack space and bitcoin
mining equipment to bitcoin miners at the Company’s new plant in Sandusky, Ohio.”
165. Investors in BTC Fund V received securities in the form of limited
liability interests in one of the three offering entities.
166. None of the offering entities in BTC Fund V filed a Form D.
f. BTC Fund VI
167. The sixth fund (“BTC Fund VI”) consisted of one offering entity, Touzi

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Gem Inv, LLC, whose proceeds were supposed to be invested in one operating entity,
Touzi Gem Mining Inv LLC.

168. Taing and Touzi Capital raised approximately $9.41 million from about
166 investors located in California, Texas, Illinois, and other states through the BTC
Fund VI offering from August to October 2022.
169. According to an investor presentation for BTC Fund VI, it was acquiring
discounted mining equipment that was already installed and therefore mining could
start immediately after the fund closed in September 2022 at facilities in North
Dakota, Texas, and North Carolina.
170. Investors in BTC Fund VI received securities in the form of limited
liability interests in Touzi Gem Inv, LLC.
171. Touzi Gem Inv, LLC did not file a Form D but claimed in its offering
documents that it was conducting a $10 million offering.
g. Additional BTC Investors
172. In addition, from November 2021 to November 2022, Touzi Capital
entities received roughly $18.09 million from approximately 249 investors that
appear to be investor funds related to a BTC Fund based on notes on the check or
wire, the name of the account into which it was deposited, or other evidence, but due
to insufficient identifying information cannot be matched to a specific fund.
173. The following table summarizes the Touzi Capital BTC Fund Offerings,
the approximate number of investors and amounts raised in those offerings:
Offering Number of Investors Amount Raised
BTC FUND I  $3,472,832
Teracel Blockchain Fund                              92

BTC FUND II  $3,254,547
Teracel Blockchain Fund II 110

BTC FUND III  $11,793,983

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Offering Number of Investors Amount Raised
Touzi Data Tech 211
Touzi Data Technology 73

BTC FUND IV  $32,889,595
Touzi Mine Invest                                  261
Touzi Mining Invest                                 199
Touzi Mining Inv 2
Touzi Mining Inv II 68
Touzi Mining Invest II 67

BTC FUND V  $15,144,050
Touzi DC Invest                                     55
Touzi Data Center Invest                              20
Touzi Data Center Inv Unknown

BTC FUND VI  $9,410,000
Touzi Gem Inv 166

Unable to Classify 249 $18,087,100

TOTAL                                         1,573                                         $94,052,107
2. Defendants Made False and Misleading Statements to
Investors in the Touzi BTC Funds
174. Taing and Touzi Capital, through offering documents, promotional
materials, and conversations with investors, made three main claims to investors
about the BTC Funds that were materially false and misleading.  First, the BTC
Funds would be able to mine bitcoin at a cost that would make the funds profitable,
so long as the price of bitcoin stayed above $10,000.  Second, this was possible, in
part, because of the fixed, low-cost energy contracts the BTC Funds had that
provided the operations with predictable costs.  Third, this was also possible because
the BTC Funds had secured high-quality mining equipment at discounted prices that

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would be operated by leading crypto asset service providers.
175. For example, Defendants’ presentations for BTC Fund I, BTC Fund II,
and BTC Fund III all touted a “[f]ixed low cost energy contract that provides
predictable costs at scale.”
176. The BTC Fund II presentation stated that Touzi Capital’s current cost to
mine one bitcoin was only $8,814, and that it had “secured” hardware at 30 percent
off retail pricing and a “low cost fixed energy contract near renewable power” at 50
percent off consumer cost.
177. The BTC Fund III presentation stated its current cost to mine one bitcoin
was only $8,155 and similarly represented that it had hardware “secured” at a
wholesale price and “low cost fixed energy contract near renewable power” at 50
percent off consumer cost.  In an email to potential investors concerning BTC Fund
III, Taing again said that there would be a “Low Cost of Mining: $8k to mine one
bitcoin.”
178. The BTC Fund IV investor presentation claimed that $10,000 was its
“low cost to mine [bitcoin]” and that this provided “downside protection” to the fund.
It reiterated in other places in the presentation that BTC Fund IV’s “bitcoin mining
has relatively low fixed cost,” and that $10,000 was its “breakeven price of bitcoin.”
179. The BTC Fund VI investor presentation claimed that it would assume a
third party’s hosting contract that “locked in reduced pricing from before supply
shock and energy price surge” and that the cost to mine one bitcoin would be
$10,000.  In a webinar promoting Bitcoin Fund VI, Taing claimed that it would
remain profitable even if the price of bitcoin were to drop to $12,000.
180. Taing made similar statements to numerous investors, claiming that
Touzi Capital could mine bitcoin at low costs such that its breakeven ranged from
$8,000 to $10,000 because it had locked-in energy costs for several years.
181. The first claim that Defendants made to investors about the BTC Funds
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materially false and misleading.
182. At most times during the BTC Fund offerings, the price of bitcoin varied
from $20,000 to $40,000, sometimes going as high as $60,000, but never less than
$16,000.  Based on the representations Defendants made to investors, at those price
points, the BTC Funds should have profitable.
183. Defendants’ statements were materially false and misleading because
Taing did not include the difficulty of mining in the calculated breakeven point.  The
difficulty of mining refers to the known principle that, as more and more crypto asset
miners compete to mine bitcoin, the complexity and thus cost of mining increases.
The breakeven claim also assumed that miners could run 24 hours a day, when in
reality, there was downtime when the mining equipment was not running at all.
184. Taing knew, or was reckless and negligent for not knowing, the claims
about the “breakeven” point for the BTC Funds were materially false and misleading.
In either 2021 or 2022, Touzi’s former head of investor relations discussed with
Taing the flaws in Taing’s methodology for calculating the Funds’ breakeven point.
Specifically, he told Taing how his two-factor formula skewed the results because it
failed to account for the difficulty of mining and the impact of downtime.  However,
Taing dismissed these concerns and continued to market his flawed pricing formula
to investors.
185. Although the risk of “difficulty growth” was briefly mentioned in the
BTC Funds’ PPMs and referenced in some investor presentations, it was not included
in the claimed cost to mine bitcoin or factored into the representations about
investors’ breakeven point.
186. The second claim that Defendants made to investors about the BTC
Funds – that the BTC Funds had fixed, low-cost energy contracts that provided the
operations with predictable costs – was also materially false and misleading.
187. From February 2021 to October 2022, Touzi Capital entities entered into
at least six different energy contracts with five different providers, at prices ranging

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from $0.046 to $0.08 per kilowatt hour – a variance of more than 40%.
188. Taing also sometimes sought energy from short-term sources at higher
prices.
189. Taing knew, or was reckless and negligent for not knowing, the claims
about the fixed energy costs for the BTC Funds were materially false and misleading,
as he was personally involved in arranging the energy contracts and short-term
sources.
190. The third claim that Defendants made to investors about the BTC Funds
– that the BTC Funds had secured high-quality mining equipment at discounted
prices – was materially false and misleading.
191. In marketing the BTC Fund III, Defendants touted that they had secured
“1000 Bitmain Antminer S19J Pros” that would be installed and setup by December
2021.  However, according to Touzi Capital Head of Crypto Mining, while Touzi
Capital did enter into a contract with Bitmain for 1,000 Antminer S19s, it only
received 334 working machines and over 600 machines that were unusable “junk
miners.”
192. While raising money for its BTC Fund IV offering in 2022, Defendants
claimed that “Touzi Capital has launched 3 previous Bitcoin Mining funds and
consistently exceeded projections.”
193. The Bitmain junk miners were not an isolated problem.  Touzi purchased
$42 million worth of miners and hosting services from Compass Mining, Compute
North, and Elite Mining, all of which subsequently filed for bankruptcy or went out
of business, and the miners purchased were either inactive or unrecoverable.
194. Taing knew, or was reckless and negligent for not knowing, the claims
about the mining equipment for the BTC Funds were materially false and misleading,
as he was personally involved in negotiating to acquire the equipment and dealing
with the problems in the equipment.
195. As a result of the false and misleading statements Defendants made to

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investors about the BTC Funds, Defendants’ ability to pay its promised returns
fluctuated wildly.  Taing blamed the falling price of bitcoin and the rising cost of
energy.  But while the market price of bitcoin has fluctuated greatly since the first
BTC Fund offerings commenced in March 2021, its price never fell below $16,000,
far more than what Defendants led many investors to believe was their breakeven
point.
196. Defendants’ statements to investors regarding how much it would cost to
mine Bitcoin, having fixed, low-cost energy contracts and the ability to secure high-
quality mining equipment at discounted prices were material and important to
investors in making their investment decisions.
3. Taing Was the Maker of These False And Misleading
Statements
197. Taing was the maker of the statements regarding the BTC Funds because
he was the managing member and control person of Touzi Capital, and the person
who disseminated information about the BTC Funds to the public.
198. Taing spoke to prospective BTC Fund investors through online seminars
(also known as webinars) that he hosted.  For example, one investor (KT) who
watched a webinar at which Taing spoke and reviewed related presentations
understood that the price at which Touzi could mine Bitcoin was determined by the
cost of hosting and electricity and that Touzi had energy contracts in place that would
keep its costs static for a significant period of time.
199. Taing answered questions from prospective investors directly through
Slack, a digital messaging system.
200. Taing spoke to prospective investors by videoconferencing systems such
as Zoom.
201. Taing directed prospective investors to an online portal maintained by
Touzi Capital that contained promotional materials, including PowerPoints, for
various Touzi investment opportunities.

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202. Accordingly, Taing had ultimate authority over the statements regarding
the BTC Funds, including their content and whether and how to communicate those
statements to investors and potential investors in the BTC Funds.
4. Defendants Commingled Funds from Investors in the BTC
Funds with Funds from Unrelated Businesses
203. Each BTC Fund PPM represented that funds raised would be invested in
a specific crypto asset mining company formed for the primary business of engaging
in blockchain mining activities.
204. In reality, funds raised from investors in the Touzi BTC Funds were used
for bitcoin mining, though not always the specific project the investor had invested
in, and were also commingled with funds from Touzi Capital’s various other
businesses and sometimes spent on costs unrelated to crypto asset mining.
205. Touzi Capital raised approximately $94 million from investors for its
BTC Funds, but only about $74.4 million was directly deposited to bank accounts in
the name of a particular BTC Fund.
206. For example, Touzi Mining Invest, LLC raised approximately $55.7
million for the stated purpose of investing in Touzi Mining LLC, but Defendants sent
only about $2.6 million to that entity’s bank account ending in x6379.  Instead, Touzi
Mining Invest, LLC transferred approximately $48 million to one of the Touzi
Capital accounts ending in x2800, which then made distributions to various other
Touzi Capital entities – some of which had nothing to do with bitcoin mining.
207. Touzi Data Center Invest LLC raised roughly $6,283,050 for the stated
purpose of investing in Touzi Data Center LLC but Defendants sent only about
$13,000 to that entity’s bank account ending in x8300. Instead, Defendants sent
approximately $4,000,000 to a PECC account ending in x1352, approximately
$1,211,000 to a Touzi Capital account ending in x2800, and roughly $800,000 to an
account ending in x5039 held by Touzi Opportunity Fund, a real estate venture
entirely unrelated to crypto asset mining.

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208. Bank records show that Defendants spent substantial amounts to
purchase or host bitcoin mining machinery, but Touzi Capital did not apportion those
costs or distribute those ownership interests to the various Touzi BTC Funds in
accordance with the terms of the investments.
5. Defendants Offered and Sold Unregistered Securities in the
BTC Fund Offerings
a. The BTC Fund LLC Units Are Securities
209. The interests that Defendants offered and sold in the BTC Funds in the
form of units in the entity LLC were securities.
210. The LLC units represented an ownership interest in the offering
company.
211. Each investor’s ownership percentage was equal to the percentage of
units they held out of the total units.
212. Investors in the BTC Funds purchased the LLC units by providing
money to Touzi Capital.
213. Investor money was supposed to be pooled together and invested in each
fund’s operating entity, which in turn was supposed to use the pooled investor money
for bitcoin mining operations.
214. Profits from the bitcoin mining operations were supposed to be shared
on a pro rata basis with each fund’s investors.
215. Investor’s ability to profit was dependent on Taing and Touzi Capital’s
ability to successfully operate the various operating companies for each fund.
216. Investors in the BTC Funds did not exercise any control or management
over the LLCs, each of which was solely managed by Touzi Capital and controlled by
Taing.
b. The BTC Fund Securities Were Unregistered and Not
Subject to an Exemption from Registration
217. None of the BTC Fund offerings were registered with the SEC.

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218. None of the BTC Fund offerings were subject to a valid exemption from
registration.
219. Taing and Touzi Capital engaged in a general solicitation of investors for
the BTC Funds offerings.
220. Taing spoke to prospective investors through online seminars (also
known as webinars) that he hosted.
221. Webinars featuring Taing promoting the BTC Fund offerings were
posted to YouTube.
222. Taing answered questions from prospective investors directly through
Slack, a digital messaging system.
223. Taing spoke to prospective investors by videoconferencing systems such
as Zoom.
224. Defendants did not provide investors with audited financial statements
for the BTC Funds.
225. Touzi Capital had potential investors in the BTC Fund offerings indicate
whether they were accredited, but did nothing to verify the assertions of those who
claimed to be accredited investors.
226.  Touzi Capital did not assess the sophistication of prospective investors
who disclosed that they were not accredited.
D. Defendant Taing Misappropriated Investor Funds and Retains
Control of Bitcoin Wallets Related to the Touzi Capital Businesses
227. Between in or about November 2020 and December 2023, Taing
misappropriated investor funds by using Touzi Capital funds to benefit himself.
228. Bank records show net transfers of approximately $3.1 million from
Touzi Capital’s bank accounts to Taing’s personal bank accounts.
229. Bank records show that approximately $700,000 in Touzi Capital funds
were used to make payments to credit cards, including a country club and a
preschool, which, on information and belief, were for Taing’s personal benefit.

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230. Taing had control over the bank accounts used to make these transfers
and payments that benefitted him personally and, on information and belief, caused
these transfers and payments to be made.
231. In total, Taing diverted roughly $3.8 million in Touzi Capital funds to
his own personal benefit.
232. In addition, five new crypto wallets were created using funds from
accounts associated with Touzi Capital between January and June 2023, which
received crypto assets with a value of at least $14.2 million as of July 1, 2024 (the
“Touzi Wallets”).  On information and belief, these crypto assets are the proceeds of
BTC Fund investments.
233. On information and belief, Taing is the only person with access to and
control of the Touzi Wallets.
E. Defendant Taing Made Lulling Statements to Investors
234. In a May 3, 2023 email to investors, Taing promised investors that he
would provide them with “frequent updates” and “answers to questions” at a webinar
that he was to host the following week.  There have been no meaningful updates from
Taing since then, who has generally not responded to the hundreds of emails and
phone messages he has received from investors.
235. Prior to that silence, according to its former head of investor relations,
Taing told investors that Touzi had lost money when Celsius Mining, FTX and
Silicon Valley Bank collapsed.  But Touzi did not have any accounts at Silicon
Valley Bank, and its former employee believes Taing was using all three events as
convenient excuses.
F. Defendants’ Scienter and Negligence
236. Defendant Taing knew, or was reckless or negligent in not knowing, that
he made and disseminated materially false and misleading statements to potential
investors in connection with the PECC and BTC offerings.
237. Taing controlled and managed all the offering and operating entities

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involved in the PECC and BTC offerings.
238. Taing had access to all of Touzi Capital’s financial accounts and crypto
asset wallets.
239. Taing engaged in extensive communications with potential investors
through online platforms, email, and conversation.
240. Taing understood the business model of LPG and Validation Partners
and even at one point owned a similar company.
241. Taing knew, or was reckless and negligent for not knowing, that PECC
investments were not similar to a money-market fund and had significant risks.
242. Taing knew, or was reckless and negligent for not knowing, that these
risks were materializing from as early as July 2022, when Validation Partners alerted
PECC that it would stop making distributions to PECC, yet he continued to represent
to investors that the PECC Funds were liquid and relatively safe investment.
243. Taing knew, or was reckless and negligent for not knowing, the claims
about the “breakeven” point for the BTC Funds were materially false and misleading.
Touzi understood and discussed with another employee how the calculations
excluded known factors but continued to use them.
244. Taing knew, or was reckless and negligent for not knowing, the claims
about the fixed energy costs for the BTC Funds were materially false and misleading,
as he was personally involved in arranging the energy contracts and short term
sources.
245. Taing knew, or was reckless and negligent for not knowing, the claims
about the mining equipment for the BTC Funds were materially false and misleading,
as he was personally involved in negotiating to acquire the equipment and dealing
with the problems related to the equipment.
246. Touzi Capital acted through and was controlled by Taing.  Therefore,
Taing’s knowledge, recklessness, and/or negligence may be imputed to Touzi
Capital.

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FIRST CLAIM FOR RELIEF
Fraud in the Connection with the Purchase and Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder
(against Defendants Taing and Touzi Capital)
247. The SEC realleges and incorporates by reference paragraphs 1 through
246 above.
248. Defendants Taing and Touzi Capital each made materially false and
misleading statements and omissions and engaged in deceptive conduct towards the
investors in connection with the offering of the PECC Notes, the PECC Funds and
the BTC Funds by commingling investor funds with funds for other Touzi Capital
companies, by claiming that investor funds would be used for discrete purposes, by
making claims about the safety of the PECC investments, by making claims about the
costs to mine bitcoin, energy costs, and mining equipment, and by misappropriating
investor funds for Taing’s personal benefit.
249. By engaging in the conduct described above, Defendants Taing and
Touzi Capital with scienter, and each of them, directly or indirectly, in connection
with the purchase or sale of a security, by the use of means or instrumentalities of
interstate commerce, of the mails, or of the facilities of a national securities
exchange:  (a) employed devices, schemes, or artifices to defraud; (b) made untrue
statements of a material fact or omitted to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they were
made, not misleading; and (c) engaged in acts, practices, or courses of business which
operated or would operate as a fraud or deceit upon other persons.
250. By engaging in the conduct described above, Defendants Taing and
Touzi Capital violated, and unless restrained and enjoined will continue to violate,
Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17
C.F.R. § 240.10b-5.
///

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SECOND CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Section 17(a) of the Securities Act
(against Defendants Taing and Touzi Capital)
251. The SEC realleges and incorporates by reference paragraphs 1 through
246 above.
252. Defendants Taing and Touzi Capital each made materially false and
misleading statements and omissions and engaged in deceptive conduct towards the
investors in connection with the offering of the PECC Notes, the PECC Funds and
the BTC Funds by commingling investor funds with funds for other Touzi Capital
companies, by claiming that investor funds would be used for discrete purposes, by
making claims about the safety of the PECC investments, by making claims about the
costs to mine bitcoin, energy costs, and mining equipment, and by misappropriating
investor funds for Taing’s personal benefit.
253. By engaging in the conduct described above, Defendants Taing and
Touzi Capital and each of them, directly or indirectly, in the offer or sale of
securities, and by the use of means or instruments of transportation or communication
in interstate commerce or by use of the mails directly or indirectly:  (a) employed
devices, schemes, or artifices to defraud; (b) obtained money or property by means of
untrue statements of a material fact or by omitting to state a material fact necessary in
order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (c) engaged in transactions, practices, or courses of
business which operated or would operate as a fraud or deceit upon the purchaser.
254. Defendants Taing and Touzi Capital, with scienter, employed devices,
schemes and artifices to defraud; with scienter or negligence, obtained money or
property by means of untrue statements of a material fact or by omitting to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and, with scienter or

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negligence, engaged in transactions, practices, or courses of business which operated
or would operate as a fraud or deceit upon the purchaser.
255. By engaging in the conduct described above, Defendants Taing and
Touzi Capital violated, and unless restrained and enjoined will continue to violate,
Section 17(a) of the Securities Act, 15 U.S.C. §§ 77q(a).
THIRD CLAIM FOR RELIEF
Unregistered Offer and Sale of Securities
Violations of Sections 5(a) and 5(c) of the Securities Act
(against Defendants Taing and Touzi Capital)
256. The SEC realleges and incorporates by reference paragraphs 1 through
246 above.
257. Defendants Taing and Touzi Capital directly and indirectly offered and
sold securities in the BTC Funds, PECC Funds, and PECC Notes in offerings that
were not registered with the SEC and that were not subject to a valid exemption to
registration.
258. By engaging in the conduct described above, Defendants Taing and
Touzi Capital, directly or indirectly, singly and in concert with others, has made use
of the means or instruments of transportation or communication in interstate
commerce, or of the mails, to offer to sell or to sell securities, or carried or caused to
be carried through the mails or in interstate commerce, by means or instruments of
transportation, securities for the purpose of sale or for delivery after sale, when no
registration statement had been filed or was in effect as to such securities, and when
no exemption from registration was applicable.
259. By engaging in the conduct described above, Defendants Taing and
Touzi Capital each violated, and unless restrained and enjoined, will continue to
violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court:

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I.
Issue findings of fact and conclusions of law that Defendants committed the
alleged violations.
II.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Taing and Touzi Capital and their officers,
agents, servants, employees and attorneys, and those persons in active concert or
participation with any of them, who receive actual notice of the judgment by personal
service or otherwise, and each of them, from violating Sections 5(a), 5(c), and 17(a)
of the Securities Act [15 U.S.C. §77e(a), 77e(c), and 77q(a)], and Section 10(b) of the
Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-
5].
III.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Taing from directly or indirectly, including
but not limited to, through any entity owned or controlled by Taing, participating in
the issuance, purchase, offer, or sale of any securities, provided, however, that such
injunction shall not prevent him from purchasing or selling securities for his own
personal account.
IV.
Enter an order against Defendant Taing pursuant to Section 20(e) of the
Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15
U.S.C. § 78u(d)(2)] prohibiting him from acting as an officer or director of any issuer
that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15
U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the
Exchange Act, 78 U.S.C. § 78o(d).
V.
Order Defendants Taing and Touzi Capital to disgorge all funds received from

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their illegal conduct, together with prejudgment interest thereon pursuant to
Exchange Act Sections 21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3),
78u(d)(5) and 78u(d)(7)].
VI.
Order Defendants to pay civil penalties under Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)].
VII.
Retain jurisdiction of this action in accordance with the principles of equity and
the Federal Rules of Civil Procedure in order to implement and carry out the terms of
all orders and decrees that may be entered, or to entertain any suitable application or
motion for additional relief within the jurisdiction of this Court.
VIII.
Grant such other and further relief as this Court may determine to be just and
necessary.
Dated:  November 20, 2024

/s/ Jasmine M. Starr
JASMINE M. STARR
PETER F. DEL GRECO
Attorneys for Plaintiff
Securities and Exchange Commission

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JASMINE M. STARR (Cal. Bar No. 259473) 
Email:  [email protected] 
PETER F. DEL GRECO (Cal. Bar No. 164925) 
Email:  [email protected] 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Katharine E. Zoladz, Regional Director 
Gary Y. Leung, Associate Regional Director 
Douglas M. Miller, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

vs. 

ENG TAING AND TOUZI CAPITAL, 
LLC, 

Defendants. 

 Case No.   

COMPLAINT 

 

DEMAND FOR JURY TRIAL 

 

 
 

Plaintiff Securities and Exchange Commission (“SEC”) alleges: 

SUMMARY 

1. This civil enforcement action concerns a $115 million securities offering 

fraud by Defendant Eng Taing (“Taing”) and the entity he controls, Defendant Touzi 

Capital, LLC (“Touzi Capital”).  When pitching these investments from 2020 to 

2023, defendants led investors to believe their investment funds would either be used 

to finance debt rehabilitation businesses or crypto asset mining businesses that Taing 

managed through Touzi Capital.   

2. Although Defendants did use investor funds to engage in these business 

'24CV2179 VETCAB

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ventures, Taing and Touzi Capital commingled investor monies, using funds intended 

for one Touzi Capital entity to meet the needs of another Touzi Capital entity.  This 

commingling violated representations Defendants made to investors that their funds 

would be used for the specific business they had invested in. 

3. In addition, Touzi Capital and Taing enticed investors with materially 

false and/or misleading statements about their business operations, claiming their 

debt rehabilitation offerings were stable and liquid investments similar to high-yield 

money market funds.  In reality, these were risky, illiquid investments that entirely 

depended on the performance of third-party companies.  When these third-party 

companies defaulted on their obligations to Touzi Capital, Defendants hid this from 

investors for at least nine months while they continued to offer and sell securities to 

new and continuing investors.  

4. Touzi Capital and Taing similarly misled investors in their crypto-asset 

mining business by marketing it as an investment that could profitably mine bitcoin at 

prices far below bitcoin’s prevailing market price.  They claimed they could 

profitably mine through low-cost, fixed term energy contracts and by using high 

quality mining equipment.  In reality, Touzi Capital’s “breakeven” point for mining 

bitcoin was misleading, because the way this was calculated excluded known factors.  

Moreover, the energy costs for Touzi Capital’s crypto-asset mining businesses 

fluctuated greatly, and it consistently had problems with its equipment.   

5. Touzi Capital and the businesses it oversaw now appear to have 

collapsed.  Touzi Capital’s investors have not been able to get answers from the 

company or from Taing and, according to several investors, he has stopped 

communicating with them.     

6. Taing controls all of the bank accounts of Touzi Capital and its affiliates, 

and additionally appears to retain control over investor assets in the form of several 

virtual wallets that may hold more than $14 million worth of bitcoin. 

7. By engaging in this conduct, Defendants violated the registration and 

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antifraud provisions of Sections 5 and 17(a) of the Securities Act and Section 10(b) of 

the Exchange Act and Rule 10b-5 thereunder.   

8. Accordingly, the SEC seeks permanent injunctions, disgorgement of ill-

gotten gains, along with pre-judgment interest, civil penalties against Defendants 

Taing and Touzi Capital, and an officer and director bar against Defendant Taing. 

JURISDICTION AND VENUE 

9. The Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 

77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the 

Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e) & 78aa(a). 

10. Defendants have, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce, of the mails, or of the facilities of a national 

securities exchange in connection with the transactions, acts, practices and courses of 

business alleged in this complaint.  

11. Venue is proper in this district pursuant to Section 22(a) of the Securities 

Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 

because certain of the transactions, acts, practices and courses of conduct constituting 

violations of the federal securities laws occurred within this district.  In addition, 

venue is proper in this district because Defendant Eng Taing resides in this district, 

and because Defendant Touzi Capital, LLC has its principal place of business in this 

district. 

DEFENDANTS 

12. Eng Taing, age 39, is a resident of San Marcos, California.  Taing is the 

sole member of Touzi Capital, LLC.     

13. Touzi Capital, LLC, is a California limited liability company located in 

San Marcos, California. 

/// 

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RELATED ENTITIES 

A. PECC Entities 

14. PECC Fund I LLC is a Delaware limited liability company managed 

by Defendant Taing.   

15. PECC Fund II LLC on information and belief is a fictitious business 

name used by Taing and Touzi Capital.     

16. PECC Fund III LLC is a Delaware limited liability company managed 

by Defendants Taing and Touzi Capital.   

17. PECC Corp. is a Delaware corporation controlled by Taing and Touzi 

Capital. 

B. BTC Fund I Entities 

18. Teracel Blockchain Fund LLC is a Delaware limited liability company 

managed by Touzi Capital.     

19. Teracel I LLC is a Delaware limited liability company managed by 

Touzi Capital. 

C. BTC Fund II Entities 

20. Teracel Blockchain Fund II LLC is a Delaware limited liability 

company managed by Touzi Capital.   

21. Teracel II LLC is a Delaware limited liability company managed by 

Touzi Capital. 

D. BTC Fund III Entities 

22. Touzi Data Tech LLC is a Delaware limited liability company 

managed by Touzi Capital.   

23. Touzi Data Technology LLC is a Delaware limited liability company 

managed by Touzi Capital.   

24. Touzi Tech LLC is a Delaware limited liability company managed by 

Touzi Capital. 

/// 

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E. BTC Fund IV Entities 

25. Touzi Mine Invest LLC is a Wyoming limited liability company 

managed by Touzi Capital.  

26. Touzi Mining Invest LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

27. Touzi Mining Inv LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

28. Touzi Mining Inv II LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

29. Touzi Mining Invest II, LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

30. Touzi Mining LLC is a Wyoming limited liability company managed 

by Touzi Capital. 

F. BTC Fund V Entities 

31. Touzi DC Invest LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

32. Touzi Data Center Invest LLC is a Wyoming limited liability 

company managed by Touzi Capital.   

33. Touzi Data Center Inv LLC is a Wyoming limited liability company 

managed by Touzi Capital.   

34. Touzi Data Center, LLC is a Wyoming limited liability company 

managed by Touzi Capital. 

G. BTC Fund VI Entities 

35. Touzi Gem Inv, LLC is a Wyoming limited liability company managed 

by Touzi Capital.   

36. Touzi Gem Mining Inv LLC is a Wyoming limited liability company 

managed by Touzi Capital. 

/// 

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FACTUAL ALLEGATIONS 

A. Touzi’s Formation and Offerings 

37. In 2020, Taing formed Touzi Capital. 

38. At all times since Touzi Capital’s formation, Taing has been the sole 

managing member of Touzi Capital. 

39. At all times since Touzi Capital’s formation, Taing has controlled Touzi 

Capital and its day-to-day operations. 

40. At all times since Touzi Capital’s formation, Taing has controlled Touzi 

Capital’s bank accounts and crypto asset wallets. 

41. In 2020, Taing and Touzi Capital began offering investors equity 

interests in funds that were formed to fund the businesses that Taing managed 

through Touzi Capital.   

42. Defendants’ initial investors consisted largely of former co-workers, but 

the number of investors expanded as Defendants solicited investors more broadly. 

43. Touzi Capital solicited investors for its offerings via webinar 

presentations hosted by Taing, podcasts on which Taing was a guest, and online 

investor forums on Reddit and elsewhere. 

44. Touzi Capital maintained an online portal open to the public where it 

made available its PPMs, power points, and other offering materials and provided 

interested investors with wiring instructions. 

45. Between 2020 and 2024, Taing managed more than two dozen 

businesses, most of which fell within four broad areas: crypto asset mining, debt 

rehabilitation, the construction of assisted-living facilities, and the development of 

commercial real estate.   

46. By 2022, Taing claimed to manage more than $350 million of investor 

funds through Touzi Capital’s various business interests. 

/// 

/// 

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B. The Touzi Capital PECC Offerings  

1. Defendants Raised Over $22 Million for Touzi Capital’s 

Distressed Debt Businesses 

47. In or around December 2020, Defendants began raising money for what 

they called “Private Equity Consumer Credit” funds (the “PECC Funds”).  They 

represented that after receiving investor capital, the funds would in turn invest fund 

assets in PECC Corp. (“PECC”), an operating company controlled by Taing and 

Touzi Capital.  According to defendants, PECC then invested in businesses that 

purportedly provided legal services to consumers in exchange for a monthly fee.  The 

legal services supposedly were designed to reduce the debt that the consumers owed.   

48. According to the terms of the PECC Fund subscription agreements, 

PECC would use investor monies to “exclusively” purchase “receivables,” defined as 

certain payment obligations under consumer contracts.  Taing told investors that 

PECC would purchase these receivables from a law firm working on debt 

rehabilitation, but he did not identify the name of the firm. 

49. As represented by Taing, PECC acquired the accounts of persons with 

significant amounts of debt, some or all of which could be invalidated through legal 

processes conducted by Litigation Practice Group (“LPG”). The debtor paid a service 

fee for the debt invalidation, with 40% going to LPG and with PECC receiving 60% 

of the fees.  PECC purchased this right to receive fees from an entity called 

Validation Partners LLC (“Validation Partners”).  PECC claimed that it typically 

acquired the accounts for $2,000 apiece and received $8,000 in program fees paid by 

the debtors over the course of 24 to 36 months. 

50. Taing and Touzi Capital raised money for PECC through three offering 

entities (“the PECC Funds”). 

51. Taing and Touzi Capital also raised money for PECC through the sale of 

promissory notes (“the PECC Notes”). 

52. There were approximately 283 investors in the PECC Funds and Notes. 

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53. Investors in multiple states purchased securities in the PECC Fund and 

Note offerings. 

54. Between December 2020 and March 2023, Taing and Touzi Capital 

raised over $22 million through the PECC Fund and Note offerings. 

55. Touzi Capital was the manager of each of the PECC Fund offering 

entities, and Taing was the manager of Touzi Capital.    

a. PECC Fund I 

56. In the PECC Fund I offering, Defendants offered securities in the form 

of membership interests in PECC Fund I LLC.  These membership interests, also 

called LLC units, were not registered with the SEC.  

57. Taing and Touzi Capital raised approximately $6.23 million from about 

120 investors through the PECC Fund I offering from December 2020 through 

August 2022. 

58. Investors in PECC Fund I were promised distributions of 12 percent per 

year and the return of their full invested capital after one year.  

59. The PECC Fund I offering documents stated that investor funds would 

be used “to purchase preferred stock of PECC Corp, which will in turn be used to 

purchase Receivables exclusively.” 

60. On August 18, 2021, PECC Fund I LLC filed an SEC Form D, Notice of 

Exempt Offering (“Form D”), for an offering of equity securities, claiming that its 

first sale was August 5, 2021, and that it had already raised $3,400,000. 

b. PECC Fund II 

61. In the PECC Fund II offering, Defendants offered securities in the form 

of membership interests in PECC Fund II LLC.  These membership interests, also 

called LLC units, were not registered with the SEC.  

62. Taing and Touzi Capital raised approximately $3.88 million through the 

PECC Fund II offering from March 2021through August 2022. 

63. In documents provided to investors, Defendants represented that PECC 

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Fund II was a Delaware limited liability company, managed by Defendant Taing, and 

formed for the purpose of raising funds for PECC Corp.   

64. The Division of Corporations of the State of Delaware does not list any 

entity on their business registry called PECC Fund II LLC.  “PECC Fund II LLC” 

therefore appears to be a fictitious name used by Taing and Touzi Capital. 

65. Investors in PECC Fund II were promised distributions of 12 percent per 

year and the return of their full invested capital after one year.  

66. The PECC Fund II offering documents stated that investor funds would 

be used “to purchase preferred stock of PECC Corp, which will in turn be used to 

purchase Receivables exclusively.” 

67. No Form D was filed for the PECC Fund II offering. 

c. PECC Fund III 

68. In the PECC Fund III offering, Defendants offered securities in the form 

of membership interests in PECC Fund III LLC.  These membership interests, also 

called LLC units, were not registered with the SEC.   

69. Taing and Touzi Capital raised approximately $4.61 million in PECC 

Fund III from April 2021 through November 2022. 

70. Investors in PECC Fund III were promised distributions of 10 percent 

per year and the return of their full invested capital after one year.  

71. The PECC Fund III offering documents stated that investor funds would 

be used “to purchase preferred stock of PECC Corp, which will in turn be used to 

purchase Receivables exclusively.”  

72. No Form D was filed for the PECC Fund II offering. 

d. PECC Notes and Unidentified Investments 

73. In addition to the PECC Fund equity offerings, Defendants also raised 

money for PECC by issuing promissory notes (“PECC Notes”). 

74. The PECC Notes were issued by PECC Corp. and promised investors a 

14 percent return and the return of their capital after one year. 

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75. From December 2020 to March 2023, Touzi Capital entities received 

over $8.14 million in what appear to be investor funds related to PECC Funds or 

PECC Notes based on notes on the check or wire, the name of the account into which 

the funds were deposited, or other evidence.   

76. The following table summarizes the approximate number of investors 

and the approximate amount of funds raised in the Touzi Capital BTC Fund 

Offerings: 

Offering Number of Investors Amount Raised 
PECC Fund I 120 $6,232,376 
PECC Fund II 50 $3,877,000 
PECC Fund III 47 $4,608,588 

PECC Notes or Unclear 66 $8,143,399 
TOTAL PECC 283 $22,861,363 

2. Defendants Made False and Misleading Statements to 

Investors in PECC 

77. As presented to investors, the main appeal of an investment in the PECC 

Funds and PECC Notes was their guaranteed monthly distributions and their 

purported liquidity.   

78. In marketing the PECC Funds, Defendants represented to investors that 

the Funds were “very stable and predictable” and that due to their “highly liquid 

nature” could be treated as “an alternative to a high-yield savings account.” 

79. Taing repeatedly stressed the liquidity of an investment in PECC, telling 

one investor by email that the PECC Fund III would have “predictable monthly cash 

flow and liquidity.” 

80. These representations about the liquidity and relative safety of the PECC 

Funds were material and important to investors in their decision to invest with Touzi 

Capital and Taing. 

81. Defendants marketed the PECC Notes similarly, offering them as an 

alternative to the PECC Funds and claiming that the only difference was that the 

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Notes were taxable and thus better suited for investors with a tax-advantaged IRA. 

82. The statements Taing made to investors regarding the PECC Funds and 

PECC Notes being liquid and relatively safe investments were materially false and 

misleading for the reasons alleged below.    

83. The PECC Funds and Notes were highly speculative and illiquid because 

the ability of the PECC Funds and Notes to pay investors the promised returns or 

provide liquidity was entirely dependent on a chain of intermediaries.  The 

receivables PECC supposedly acquired were the stream of payments that LPG’s 

clients were supposed to pay for debt rehabilitation services, which LPG would pay 

to Validation Partners who would in turn pay PECC.  But at every link in that chain 

between LPG’s clients and PECC were significant risks that were not adequately 

disclosed to investors.  The consumers who had agreed to pay LPG a monthly fee had 

hired LPG to invalidate or negotiate settlements of their outstanding debts and thus 

there was a risk they would not make payment on the debts they owed LPG.   

84. Investors in the PECC Funds were also exposed to a wide range of 

undisclosed risks beyond the risk that the underlying LPG clients would not make 

their contracted payments, including the risk that LPG would not transfer payments to 

Validation Partners, the risk that Validation Partners would not transfer the payment 

to PECC, the risk of fraud by Validation Partners or LPG, and the risk that LPG was 

operating illegally and violating consumer protection laws, including a law that 

prohibits for-profit companies that sell debt rehabilitation services over the telephone 

from charging a fee before they actually settle or reduce a consumer’s debt.  

85. Because Defendants did not adequately disclose these risks to investors, 

Defendants’ statements regarding the PECC Funds and PECC Notes being liquid and 

relatively safe investments were materially misleading. 

86. Taing knew, or was reckless and negligent for not knowing, about these 

risks because he controlled PECC Corp. and was the manager of all the PECC 

offering entities.  Taing understood the business model of LPG and Validation 

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Partners and even at one point owned a similar company. 

87. In addition, Taing knew, or was reckless and negligent for not knowing, 

that these risks were materializing from as early as July 2022, when Validation 

Partners alerted PECC that it would stop making distributions to PECC, yet he 

continued to represent to investors that the PECC Funds were liquid and relatively 

safe investment. 

88. When LPG was falling behind on its payments, Taing insisted that Touzi 

Capital project confidence in an effort to control the situation.  When a Touzi Capital 

employee suggested to Taing that he close the PECC fund to new investors, Taing 

refused. 

89. Instead, from August 2022 to March 2023, Defendants persuaded 

existing investors to re-invest in the PECC Funds without disclosing the risks and 

problems with Validation Partners and LPG.  

90. For example, on October 26, 2022, Taing emailed a PECC Fund II 

investor (KF) whose investment was maturing in November 2022 and provided her 

assurances that convinced her to re-invest in PECC when her existing investments 

matured in November 2022 and January 2023.  Taing did not disclose the problems 

with Validation Partners that had come to his attention at least by July 2022.  Had the 

investor known about these problems, she would not have re-invested.   

91. On March 20, 2023, LPG filed for bankruptcy.  The receivables PECC 

acquired from LPG appear to have no current value.  PECC paid $22,962,250 for the 

purchase of debtor files but only received $14,342,508 in revenue, for a net loss of 

$8,619,742. 

92. In or around April 2023, PECC ceased making the monthly payments to 

investors in the PECC Funds and Note investors and ceased honoring liquidation 

requests.  

93. It was not until May 2023 that Taing told investors that Touzi Capital 

had, starting in July 2022, experienced payment problems on the PECC funds. 

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3. Taing Was the Maker of These False and Misleading 

Statements  

94. Taing was the maker of the materially false and misleading statements 

regarding the PECC Funds and PECC Notes because he was the managing member 

and control person of Touzi Capital, and the person who disseminated information 

about the PECC Funds and PECC Notes to the public.  

95. Taing spoke to prospective PECC investors through online seminars 

(also known as webinars) that he hosted.  For example, one investor (JG) who 

attended webinars at which Taing spoke understood the PECC funds to provide 

guaranteed returns and liquidity. 

96. Taing answered questions from prospective investors directly through 

Slack, a digital messaging system. 

97. Taing spoke to prospective investors by videoconferencing systems such 

as Zoom.  One investor (AJ) who had several communications with Taing on Zoom 

recalled Taing telling him that investing in a PECC Fund would be like investing in a 

high-yield savings account and stressing its liquidity. 

98. Taing directed prospective investors to an online portal maintained by 

Touzi Capital that contained promotional materials, including PowerPoints, for 

various Touzi investment opportunities. 

99. Accordingly, Taing had ultimate authority over the statements regarding 

the PECC Funds and PECC Notes, including their content and whether and how to 

communicate those statements to investors and potential investors in the PECC Funds 

and PECC Notes. 

4. Defendants Commingled Funds from Investors in the PECC 

Funds and Notes with Funds from Unrelated Businesses 

100. The offering documents for the PECC Funds, and by extension the Notes 

that were marketed as a similar alternative to the PECC Funds, represented that 

investor funds would be invested in PECC Corp., which in turn would use the funds 

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to purchase payment obligations under consumer contracts. 

101. In reality, Defendants did not segregate the investors funds they received 

for the PECC Funds or invest them exclusively in PECC Corp., but instead 

commingled those monies with other monies invested in unrelated Touzi Capital 

entities.   

102. In total, PECC Fund accounts transferred a net amount of about 

$7,585,600 to Touzi Capital accounts. 

103. PECC Fund accounts also made transfers to other Touzi Capital 

businesses.  For example, on June 1, 2022, Defendants transferred approximately 

$1,000,500 from a PECC bank account ending in x1352 to an account for an 

unrelated Touzi Capital business ending in x2836.  That business then used the funds 

to pay about $920,000 in construction-related bills that were unrelated to PECC’s 

business.  

104. Then, on June 6 and 7, 2022, Defendants transferred a total of 

approximately $3,000,000 from a PECC Fund account ending in x1352 to a Touzi 

Capital account ending in x2800, which then paid about $1,038,455 in mining fees 

for Touzi’s crypto asset mining business that were unrelated to PECC’s business.  

Without the transfers from the PECC Fund account, the Touzi Capital account ending 

in x2800 would have not had sufficient funds to pay the mining fees. 

105. In total, PECC Fund accounts paid approximately $1,592,500 to 

unrelated Touzi businesses, not including the amounts that were sent directly to Touzi 

Capital.  Although the PECC Fund accounts received transfers of approximately 

$6,546,741 from unrelated Touzi businesses, investor funds were not supposed to be 

commingled in this way, and that commingling was contrary to what Defendants 

represented to investors in the PPMs. 

/// 

/// 

/// 

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5. Defendants Offered and Sold Unregistered Securities in the 

PECC Notes and Funds Offerings 

a. The PECC Fund Units Are Securities 

106. Defendants offered and sold equity securities in the PECC Funds in the 

form of units in the offering entity LLC. 

107. The LLC units represented an ownership interest in the offering 

company.   

108. Each investor’s ownership percentage was equal to the percentage of 

units they held out of the total units. 

109. Investors in the PECC Funds purchased the securities by providing 

money to Touzi Capital or the offering entity.   

110. Investor money was supposed to be pooled together and invested in 

PECC Corp., which in turn was supposed to use the pooled investor money to 

purchase receivables. 

111. Profits from PECC Corp. were supposed to be shared with investors 

through the promised distributions. 

112. Investor’s ability to profit was dependent on Taing and Touzi Capital’s 

ability to successfully operate PECC Corp. 

113. Investors in the PECC Funds did not exercise any control or 

management over the LLCs, each of which was solely managed by Touzi Capital and 

controlled by Taing. 

114. Defendants sold securities in the PECC Funds to at least 217 investors 

located in in California, Idaho, New York, and other states. 

b. The PECC Notes Are Securities 

115.  The PECC Notes offered and sold by Defendants are also securities. 

116. Investors in the PECC Notes purchased the promissory notes by 

providing money to Touzi Capital or PECC. 

117. The PECC Notes promised investors returns of 14 percent per year, 

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which far exceeded the rates available on traditional and more conservative 

retirement investments such as CDs or money market accounts.   

118. Defendants claimed they would use the monies raised from investors to 

finance the operating expenses of PECC Corp. 

119. Defendants marketed, offered and sold the notes to a broad segment of 

the public. 

120. A reasonable member of the investing public would consider the notes to 

be securities, as they viewed the notes as an investment given how Defendants 

marketed them as high-return opportunities for investors.   

121. There is no alternate regulatory scheme for the PECC Notes. 

122. Profits from PECC Corp. were supposed to be shared with note investors 

through the promised returns. 

123. Investor’s ability to profit was dependent on Taing and Touzi Capital’s 

ability to successfully operate the debt rehabilitation business. 

124. Investors in the PECC Notes did not exercise any control or management 

over PECC Corp. 

c. The PECC Fund and Note Securities Were Unregistered 

and Not Subject to an Exemption from Registration 

125. None of the PECC Fund or PECC Note offerings were registered with 

the SEC. 

126. None of the PECC Fund or PECC Note offerings were subject to a valid 

exemption from registration. 

127. Taing and Touzi Capital engaged in general solicitation of investors for 

the PECC Fund and PECC Note offerings. 

128. Taing spoke to prospective investors through online seminars (also 

known as webinars) that he hosted. 

129. Taing answered questions from prospective investors directly through 

Slack, a digital messaging system. 

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130. Taing spoke to prospective investors by videoconferencing systems such 

as Zoom. 

131. Taing directed prospective investors to an online portal maintained by 

Touzi Capital that contained promotional materials, including PowerPoints, for 

various Touzi investment opportunities. 

132. Defendants did not provide investors with audited financial statements 

for the PECC Fund and PECC Note offerings. 

133. Touzi Capital had potential investors in the PECC Fund and PECC Note 

offerings indicate whether they were accredited, but did nothing to verify the 

assertions of those who claimed to be accredited investors. 

134.  Touzi Capital did not assess the sophistication of prospective investors 

who disclosed that they were not accredited.   

C. The Touzi BTC Funds 

1. Defendants Raised Over $94 Million for Touzi Capital’s 

Crypto Asset Mining Businesses 

135. Touzi Capital also offered investors the opportunity to invest in funds 

that claimed investor funds would be used to mine bitcoin and other crypto assets (the 

“BTC Funds”). 

136. Taing and Touzi Capital raised approximately $94 million from 

investors for the Touzi BTC Funds. 

137. There were roughly 1,573 investors in the BTC Funds located in 

California, New York, Texas, and other states. 

138. The Touzi BTC Funds consisted of 6 groups of funds.  Each group 

consisted of one or more offering entities that purported to invest in an operating 

entity engaged in the business of crypto asset mining. 

139. Touzi Capital was the manager of each of the BTC Fund offering 

entities, and Taing was the manager of Touzi Capital. 

140. Although the purpose of each of the BTC Funds was to finance crypto 

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asset mining activities, they purported to raise money for different operating entities, 

which were supposed to acquire mining equipment and pay returns based on the 

performance of those miners. 

a. BTC Fund I 

141. The first fund (“BTC Fund I”) consisted of one offering entity, Teracel 

Blockchain Fund, LLC, whose proceeds were supposed to be invested in one 

operating entity, Teracel I LLC. 

142. Taing and Touzi Capital raised approximately $3.47 million from about 

92 investors located in California, New York, Texas, Georgia, and other states 

through the BTC Fund I offering from March through September 2021.   

143. According to an investor presentation for BTC Fund I, investor funds 

would be used to acquire mining equipment in March 2021 and begin mining in the 

second quarter of 2021 at a facility in Kearney, Nebraska.   

144. Investors in BTC Fund I received securities in the form of limited 

liability interests in Teracel Blockchain Fund, LLC.   

145. On May 20, 2021, Teracel Blockchain Fund, LLC filed a Form D for a 

$5 million offering of equity securities, which was signed by Taing.  The filing 

claimed that its first sale was March 8, 2021, and that it had already raised 

$4,145,000. 

b. BTC Fund II 

146. The second fund (“BTC Fund II”) consisted of one offering entity, 

Teracel Blockchain Fund II, LLC, whose proceeds were supposed to be invested in 

one operating entity, Teracel II LLC.   

147. Taing and Touzi Capital raised approximately $3.25 million from about 

110 investors located in California, Texas, New Jersey, and other states through the 

BTC Fund II offering from June through September 2021. 

148. According to an investor presentation for BTC Fund II, investor funds 

would be used to acquire 500 miners in June 2021 and be setup by September 2021 at 

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facilities in Kearney, Nebraska, and Big Springs, Texas.   

149. Investors in BTC Fund II received securities in the form of limited 

liability interests in Teracel Blockchain Fund II, LLC.   

150. On August 18, 2021, Teracel Blockchain Fund II, LLC filed a Form D 

for a $5 million offering of equity securities.  The filing claimed that its first sale was 

August 4, 2021, and that it had already raised $5,000,000. 

c. BTC Fund III 

151. The third fund (“BTC Fund III”) consisted of two offering entities, 

Touzi Data Tech, LLC and Touzi Data Technology, LLC,  whose proceeds were 

supposed to be invested in one operating entity, Touzi Tech LLC.   

152. Taing and Touzi Capital raised approximately $11.79 million from about 

284 investors located in California, Texas, Florida, and other states through the BTC 

Fund III offering from April 2021 through March 2022. 

153. According to an investor presentation for BTC Fund III, it would acquire 

1,000 miners in August 2021 that would be setup by December 2021 at facilities in 

Pueblo, Colorado.   

154. Investors in BTC Fund III received securities in the form of limited 

liability interests in Touzi Data Tech, LLC or Touzi Data Technology, LLC.    

155. Touzi Data Tech, LLC did not file a Form D but claimed in its offering 

documents that it was conducting a $10 million offering. 

156. On August 8, 2022, Touzi Data Technology, LLC filed a Form D for a 

$10 million offering of equity securities, claiming that its first sale was November 8, 

2021, and that it had already raised $3,236,100. 

d. BTC Fund IV 

157. The fourth fund (“BTC Fund IV”) consisted of five offering entities, 

Touzi Mine Invest, LLC, Touzi Mining Invest, LLC, Touzi Mining Inv, LLC, Touzi 

Mining Inv II, LLC, and Touzi Mining Invest II, LLC, whose proceeds were 

supposed to be invested in one operating entity, Touzi Mining LLC.   

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158. Taing and Touzi Capital raised approximately $32.89 million from about 

597 investors located in California, New York, Texas, and other states through the 

BTC Fund IV offering from November 2021 through June 2022. 

159. According to an investor presentation for BTC Fund IV, it would acquire 

miners in February 2022 and begin mining by May 2022 at facilities in Sandusky, 

Ohio.   

160. Investors in BTC Fund IV received securities in the form of limited 

liability interests in one of the five offering entities.     

161. Touzi Mining Invest II, LLC filed a Form D on July 15, 2022, for a $40 

million offering of equity securities, claiming that its first sale was May 3, 2022, and 

that it had already raised $11,351,000.  None of the other offering entities in BTC 

Fund IV filed a Form D. 

e. BTC Fund V 

162. The fifth fund (“BTC Fund V”) consisted of three offering entities, 

Touzi DC Invest, LLC, Touzi Data Center Invest, LLC, and Touzi Data Center Inv 

LLC, whose proceeds were supposed to be invested in one operating entity, Touzi 

Data Center, LLC.   

163. Taing and Touzi Capital raised approximately $15.14 million from about 

75 investors located in California, Illinois, Florida, and other states through the BTC 

Fund V offering from March through June 2022. 

164. The PPMs for BTC Fund V stated that Touzi Data Center LLC would 

use the funds raised “to acquire and lease the data center rack space and bitcoin 

mining equipment to bitcoin miners at the Company’s new plant in Sandusky, Ohio.” 

165. Investors in BTC Fund V received securities in the form of limited 

liability interests in one of the three offering entities.    

166. None of the offering entities in BTC Fund V filed a Form D. 

f. BTC Fund VI 

167. The sixth fund (“BTC Fund VI”) consisted of one offering entity, Touzi 

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Gem Inv, LLC, whose proceeds were supposed to be invested in one operating entity, 

Touzi Gem Mining Inv LLC.    

168. Taing and Touzi Capital raised approximately $9.41 million from about 

166 investors located in California, Texas, Illinois, and other states through the BTC 

Fund VI offering from August to October 2022. 

169. According to an investor presentation for BTC Fund VI, it was acquiring 

discounted mining equipment that was already installed and therefore mining could 

start immediately after the fund closed in September 2022 at facilities in North 

Dakota, Texas, and North Carolina.   

170. Investors in BTC Fund VI received securities in the form of limited 

liability interests in Touzi Gem Inv, LLC. 

171. Touzi Gem Inv, LLC did not file a Form D but claimed in its offering 

documents that it was conducting a $10 million offering. 

g. Additional BTC Investors 

172. In addition, from November 2021 to November 2022, Touzi Capital 

entities received roughly $18.09 million from approximately 249 investors that 

appear to be investor funds related to a BTC Fund based on notes on the check or 

wire, the name of the account into which it was deposited, or other evidence, but due 

to insufficient identifying information cannot be matched to a specific fund. 

173. The following table summarizes the Touzi Capital BTC Fund Offerings, 

the approximate number of investors and amounts raised in those offerings:  

Offering Number of Investors Amount Raised 

BTC FUND I  $3,472,832 
Teracel Blockchain Fund 92  

   
BTC FUND II  $3,254,547 

Teracel Blockchain Fund II 110  
   

BTC FUND III  $11,793,983 

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Offering Number of Investors Amount Raised 

Touzi Data Tech 211  
Touzi Data Technology 73  

   
BTC FUND IV  $32,889,595 

Touzi Mine Invest 261  
Touzi Mining Invest 199  

Touzi Mining Inv 2  
Touzi Mining Inv II 68  

Touzi Mining Invest II 67  
   

BTC FUND V  $15,144,050 
Touzi DC Invest 55  

Touzi Data Center Invest 20  
Touzi Data Center Inv Unknown  

   
BTC FUND VI  $9,410,000 
Touzi Gem Inv 166  

   
Unable to Classify 249 $18,087,100 

   
TOTAL 1,573 $94,052,107 

2. Defendants Made False and Misleading Statements to 

Investors in the Touzi BTC Funds 

174. Taing and Touzi Capital, through offering documents, promotional 

materials, and conversations with investors, made three main claims to investors 

about the BTC Funds that were materially false and misleading.  First, the BTC 

Funds would be able to mine bitcoin at a cost that would make the funds profitable, 

so long as the price of bitcoin stayed above $10,000.  Second, this was possible, in 

part, because of the fixed, low-cost energy contracts the BTC Funds had that 

provided the operations with predictable costs.  Third, this was also possible because 

the BTC Funds had secured high-quality mining equipment at discounted prices that 

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would be operated by leading crypto asset service providers. 

175. For example, Defendants’ presentations for BTC Fund I, BTC Fund II, 

and BTC Fund III all touted a “[f]ixed low cost energy contract that provides 

predictable costs at scale.” 

176. The BTC Fund II presentation stated that Touzi Capital’s current cost to 

mine one bitcoin was only $8,814, and that it had “secured” hardware at 30 percent 

off retail pricing and a “low cost fixed energy contract near renewable power” at 50 

percent off consumer cost. 

177. The BTC Fund III presentation stated its current cost to mine one bitcoin 

was only $8,155 and similarly represented that it had hardware “secured” at a 

wholesale price and “low cost fixed energy contract near renewable power” at 50 

percent off consumer cost.  In an email to potential investors concerning BTC Fund 

III, Taing again said that there would be a “Low Cost of Mining: $8k to mine one 

bitcoin.” 

178. The BTC Fund IV investor presentation claimed that $10,000 was its 

“low cost to mine [bitcoin]” and that this provided “downside protection” to the fund.  

It reiterated in other places in the presentation that BTC Fund IV’s “bitcoin mining 

has relatively low fixed cost,” and that $10,000 was its “breakeven price of bitcoin.” 

179. The BTC Fund VI investor presentation claimed that it would assume a 

third party’s hosting contract that “locked in reduced pricing from before supply 

shock and energy price surge” and that the cost to mine one bitcoin would be 

$10,000.  In a webinar promoting Bitcoin Fund VI, Taing claimed that it would 

remain profitable even if the price of bitcoin were to drop to $12,000. 

180. Taing made similar statements to numerous investors, claiming that 

Touzi Capital could mine bitcoin at low costs such that its breakeven ranged from 

$8,000 to $10,000 because it had locked-in energy costs for several years.  

181. The first claim that Defendants made to investors about the BTC Funds 

– that between $8,000 to $10,000 was the “breakeven” point for profitability – was 

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materially false and misleading.   

182. At most times during the BTC Fund offerings, the price of bitcoin varied 

from $20,000 to $40,000, sometimes going as high as $60,000, but never less than 

$16,000.  Based on the representations Defendants made to investors, at those price 

points, the BTC Funds should have profitable. 

183. Defendants’ statements were materially false and misleading because 

Taing did not include the difficulty of mining in the calculated breakeven point.  The 

difficulty of mining refers to the known principle that, as more and more crypto asset 

miners compete to mine bitcoin, the complexity and thus cost of mining increases.  

The breakeven claim also assumed that miners could run 24 hours a day, when in 

reality, there was downtime when the mining equipment was not running at all.   

184. Taing knew, or was reckless and negligent for not knowing, the claims 

about the “breakeven” point for the BTC Funds were materially false and misleading.  

In either 2021 or 2022, Touzi’s former head of investor relations discussed with 

Taing the flaws in Taing’s methodology for calculating the Funds’ breakeven point.  

Specifically, he told Taing how his two-factor formula skewed the results because it 

failed to account for the difficulty of mining and the impact of downtime.  However, 

Taing dismissed these concerns and continued to market his flawed pricing formula 

to investors.  

185. Although the risk of “difficulty growth” was briefly mentioned in the 

BTC Funds’ PPMs and referenced in some investor presentations, it was not included 

in the claimed cost to mine bitcoin or factored into the representations about 

investors’ breakeven point.      

186. The second claim that Defendants made to investors about the BTC 

Funds – that the BTC Funds had fixed, low-cost energy contracts that provided the 

operations with predictable costs – was also materially false and misleading.   

187. From February 2021 to October 2022, Touzi Capital entities entered into 

at least six different energy contracts with five different providers, at prices ranging 

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from $0.046 to $0.08 per kilowatt hour – a variance of more than 40%. 

188. Taing also sometimes sought energy from short-term sources at higher 

prices.   

189. Taing knew, or was reckless and negligent for not knowing, the claims 

about the fixed energy costs for the BTC Funds were materially false and misleading, 

as he was personally involved in arranging the energy contracts and short-term 

sources. 

190. The third claim that Defendants made to investors about the BTC Funds 

– that the BTC Funds had secured high-quality mining equipment at discounted 

prices – was materially false and misleading.  

191. In marketing the BTC Fund III, Defendants touted that they had secured 

“1000 Bitmain Antminer S19J Pros” that would be installed and setup by December 

2021.  However, according to Touzi Capital Head of Crypto Mining, while Touzi 

Capital did enter into a contract with Bitmain for 1,000 Antminer S19s, it only 

received 334 working machines and over 600 machines that were unusable “junk 

miners.”   

192. While raising money for its BTC Fund IV offering in 2022, Defendants 

claimed that “Touzi Capital has launched 3 previous Bitcoin Mining funds and 

consistently exceeded projections.” 

193. The Bitmain junk miners were not an isolated problem.  Touzi purchased 

$42 million worth of miners and hosting services from Compass Mining, Compute 

North, and Elite Mining, all of which subsequently filed for bankruptcy or went out 

of business, and the miners purchased were either inactive or unrecoverable.   

194. Taing knew, or was reckless and negligent for not knowing, the claims 

about the mining equipment for the BTC Funds were materially false and misleading, 

as he was personally involved in negotiating to acquire the equipment and dealing 

with the problems in the equipment. 

195. As a result of the false and misleading statements Defendants made to 

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investors about the BTC Funds, Defendants’ ability to pay its promised returns 

fluctuated wildly.  Taing blamed the falling price of bitcoin and the rising cost of 

energy.  But while the market price of bitcoin has fluctuated greatly since the first 

BTC Fund offerings commenced in March 2021, its price never fell below $16,000, 

far more than what Defendants led many investors to believe was their breakeven 

point. 

196. Defendants’ statements to investors regarding how much it would cost to 

mine Bitcoin, having fixed, low-cost energy contracts and the ability to secure high-

quality mining equipment at discounted prices were material and important to 

investors in making their investment decisions. 

3. Taing Was the Maker of These False And Misleading 

Statements  

197. Taing was the maker of the statements regarding the BTC Funds because 

he was the managing member and control person of Touzi Capital, and the person 

who disseminated information about the BTC Funds to the public.  

198. Taing spoke to prospective BTC Fund investors through online seminars 

(also known as webinars) that he hosted.  For example, one investor (KT) who 

watched a webinar at which Taing spoke and reviewed related presentations 

understood that the price at which Touzi could mine Bitcoin was determined by the 

cost of hosting and electricity and that Touzi had energy contracts in place that would 

keep its costs static for a significant period of time. 

199. Taing answered questions from prospective investors directly through 

Slack, a digital messaging system. 

200. Taing spoke to prospective investors by videoconferencing systems such 

as Zoom. 

201. Taing directed prospective investors to an online portal maintained by 

Touzi Capital that contained promotional materials, including PowerPoints, for 

various Touzi investment opportunities. 

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202. Accordingly, Taing had ultimate authority over the statements regarding 

the BTC Funds, including their content and whether and how to communicate those 

statements to investors and potential investors in the BTC Funds. 

4. Defendants Commingled Funds from Investors in the BTC 

Funds with Funds from Unrelated Businesses  

203. Each BTC Fund PPM represented that funds raised would be invested in 

a specific crypto asset mining company formed for the primary business of engaging 

in blockchain mining activities. 

204. In reality, funds raised from investors in the Touzi BTC Funds were used 

for bitcoin mining, though not always the specific project the investor had invested 

in, and were also commingled with funds from Touzi Capital’s various other 

businesses and sometimes spent on costs unrelated to crypto asset mining. 

205. Touzi Capital raised approximately $94 million from investors for its 

BTC Funds, but only about $74.4 million was directly deposited to bank accounts in 

the name of a particular BTC Fund. 

206. For example, Touzi Mining Invest, LLC raised approximately $55.7 

million for the stated purpose of investing in Touzi Mining LLC, but Defendants sent 

only about $2.6 million to that entity’s bank account ending in x6379.  Instead, Touzi 

Mining Invest, LLC transferred approximately $48 million to one of the Touzi 

Capital accounts ending in x2800, which then made distributions to various other 

Touzi Capital entities – some of which had nothing to do with bitcoin mining. 

207. Touzi Data Center Invest LLC raised roughly $6,283,050 for the stated 

purpose of investing in Touzi Data Center LLC but Defendants sent only about 

$13,000 to that entity’s bank account ending in x8300. Instead, Defendants sent 

approximately $4,000,000 to a PECC account ending in x1352, approximately 

$1,211,000 to a Touzi Capital account ending in x2800, and roughly $800,000 to an 

account ending in x5039 held by Touzi Opportunity Fund, a real estate venture 

entirely unrelated to crypto asset mining. 

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208. Bank records show that Defendants spent substantial amounts to 

purchase or host bitcoin mining machinery, but Touzi Capital did not apportion those 

costs or distribute those ownership interests to the various Touzi BTC Funds in 

accordance with the terms of the investments. 

5. Defendants Offered and Sold Unregistered Securities in the 

BTC Fund Offerings 

a. The BTC Fund LLC Units Are Securities 

209. The interests that Defendants offered and sold in the BTC Funds in the 

form of units in the entity LLC were securities. 

210. The LLC units represented an ownership interest in the offering 

company.   

211. Each investor’s ownership percentage was equal to the percentage of 

units they held out of the total units. 

212. Investors in the BTC Funds purchased the LLC units by providing 

money to Touzi Capital.   

213. Investor money was supposed to be pooled together and invested in each 

fund’s operating entity, which in turn was supposed to use the pooled investor money 

for bitcoin mining operations. 

214. Profits from the bitcoin mining operations were supposed to be shared 

on a pro rata basis with each fund’s investors. 

215. Investor’s ability to profit was dependent on Taing and Touzi Capital’s 

ability to successfully operate the various operating companies for each fund. 

216. Investors in the BTC Funds did not exercise any control or management 

over the LLCs, each of which was solely managed by Touzi Capital and controlled by 

Taing. 

b. The BTC Fund Securities Were Unregistered and Not 

Subject to an Exemption from Registration 

217. None of the BTC Fund offerings were registered with the SEC. 

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218. None of the BTC Fund offerings were subject to a valid exemption from 

registration. 

219. Taing and Touzi Capital engaged in a general solicitation of investors for 

the BTC Funds offerings. 

220. Taing spoke to prospective investors through online seminars (also 

known as webinars) that he hosted. 

221. Webinars featuring Taing promoting the BTC Fund offerings were 

posted to YouTube. 

222. Taing answered questions from prospective investors directly through 

Slack, a digital messaging system. 

223. Taing spoke to prospective investors by videoconferencing systems such 

as Zoom. 

224. Defendants did not provide investors with audited financial statements 

for the BTC Funds. 

225. Touzi Capital had potential investors in the BTC Fund offerings indicate 

whether they were accredited, but did nothing to verify the assertions of those who 

claimed to be accredited investors. 

226.  Touzi Capital did not assess the sophistication of prospective investors 

who disclosed that they were not accredited.   

D. Defendant Taing Misappropriated Investor Funds and Retains 

Control of Bitcoin Wallets Related to the Touzi Capital Businesses 

227. Between in or about November 2020 and December 2023, Taing 

misappropriated investor funds by using Touzi Capital funds to benefit himself. 

228. Bank records show net transfers of approximately $3.1 million from 

Touzi Capital’s bank accounts to Taing’s personal bank accounts.   

229. Bank records show that approximately $700,000 in Touzi Capital funds 

were used to make payments to credit cards, including a country club and a 

preschool, which, on information and belief, were for Taing’s personal benefit. 

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230. Taing had control over the bank accounts used to make these transfers 

and payments that benefitted him personally and, on information and belief, caused 

these transfers and payments to be made. 

231. In total, Taing diverted roughly $3.8 million in Touzi Capital funds to 

his own personal benefit. 

232. In addition, five new crypto wallets were created using funds from 

accounts associated with Touzi Capital between January and June 2023, which 

received crypto assets with a value of at least $14.2 million as of July 1, 2024 (the 

“Touzi Wallets”).  On information and belief, these crypto assets are the proceeds of 

BTC Fund investments. 

233. On information and belief, Taing is the only person with access to and 

control of the Touzi Wallets.   

E. Defendant Taing Made Lulling Statements to Investors 

234. In a May 3, 2023 email to investors, Taing promised investors that he 

would provide them with “frequent updates” and “answers to questions” at a webinar 

that he was to host the following week.  There have been no meaningful updates from 

Taing since then, who has generally not responded to the hundreds of emails and 

phone messages he has received from investors.   

235. Prior to that silence, according to its former head of investor relations, 

Taing told investors that Touzi had lost money when Celsius Mining, FTX and 

Silicon Valley Bank collapsed.  But Touzi did not have any accounts at Silicon 

Valley Bank, and its former employee believes Taing was using all three events as 

convenient excuses.   

F. Defendants’ Scienter and Negligence 

236. Defendant Taing knew, or was reckless or negligent in not knowing, that 

he made and disseminated materially false and misleading statements to potential 

investors in connection with the PECC and BTC offerings.   

237. Taing controlled and managed all the offering and operating entities 

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involved in the PECC and BTC offerings.   

238. Taing had access to all of Touzi Capital’s financial accounts and crypto 

asset wallets.   

239. Taing engaged in extensive communications with potential investors 

through online platforms, email, and conversation.    

240. Taing understood the business model of LPG and Validation Partners 

and even at one point owned a similar company. 

241. Taing knew, or was reckless and negligent for not knowing, that PECC 

investments were not similar to a money-market fund and had significant risks. 

242. Taing knew, or was reckless and negligent for not knowing, that these 

risks were materializing from as early as July 2022, when Validation Partners alerted 

PECC that it would stop making distributions to PECC, yet he continued to represent 

to investors that the PECC Funds were liquid and relatively safe investment. 

243. Taing knew, or was reckless and negligent for not knowing, the claims 

about the “breakeven” point for the BTC Funds were materially false and misleading.  

Touzi understood and discussed with another employee how the calculations 

excluded known factors but continued to use them.   

244. Taing knew, or was reckless and negligent for not knowing, the claims 

about the fixed energy costs for the BTC Funds were materially false and misleading, 

as he was personally involved in arranging the energy contracts and short term 

sources. 

245. Taing knew, or was reckless and negligent for not knowing, the claims 

about the mining equipment for the BTC Funds were materially false and misleading, 

as he was personally involved in negotiating to acquire the equipment and dealing 

with the problems related to the equipment. 

246. Touzi Capital acted through and was controlled by Taing.  Therefore, 

Taing’s knowledge, recklessness, and/or negligence may be imputed to Touzi 

Capital. 

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FIRST CLAIM FOR RELIEF 

Fraud in the Connection with the Purchase and Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder 

(against Defendants Taing and Touzi Capital) 

247. The SEC realleges and incorporates by reference paragraphs 1 through 

246 above. 

248. Defendants Taing and Touzi Capital each made materially false and 

misleading statements and omissions and engaged in deceptive conduct towards the 

investors in connection with the offering of the PECC Notes, the PECC Funds and 

the BTC Funds by commingling investor funds with funds for other Touzi Capital 

companies, by claiming that investor funds would be used for discrete purposes, by 

making claims about the safety of the PECC investments, by making claims about the 

costs to mine bitcoin, energy costs, and mining equipment, and by misappropriating 

investor funds for Taing’s personal benefit.   

249. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital with scienter, and each of them, directly or indirectly, in connection 

with the purchase or sale of a security, by the use of means or instrumentalities of 

interstate commerce, of the mails, or of the facilities of a national securities 

exchange:  (a) employed devices, schemes, or artifices to defraud; (b) made untrue 

statements of a material fact or omitted to state a material fact necessary in order to 

make the statements made, in the light of the circumstances under which they were 

made, not misleading; and (c) engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon other persons. 

250. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital violated, and unless restrained and enjoined will continue to violate, 

Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 

C.F.R. § 240.10b-5. 

/// 

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SECOND CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Section 17(a) of the Securities Act 

(against Defendants Taing and Touzi Capital) 

251. The SEC realleges and incorporates by reference paragraphs 1 through 

246 above. 

252. Defendants Taing and Touzi Capital each made materially false and 

misleading statements and omissions and engaged in deceptive conduct towards the 

investors in connection with the offering of the PECC Notes, the PECC Funds and 

the BTC Funds by commingling investor funds with funds for other Touzi Capital 

companies, by claiming that investor funds would be used for discrete purposes, by 

making claims about the safety of the PECC investments, by making claims about the 

costs to mine bitcoin, energy costs, and mining equipment, and by misappropriating 

investor funds for Taing’s personal benefit.   

253. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital and each of them, directly or indirectly, in the offer or sale of 

securities, and by the use of means or instruments of transportation or communication 

in interstate commerce or by use of the mails directly or indirectly:  (a) employed 

devices, schemes, or artifices to defraud; (b) obtained money or property by means of 

untrue statements of a material fact or by omitting to state a material fact necessary in 

order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (c) engaged in transactions, practices, or courses of 

business which operated or would operate as a fraud or deceit upon the purchaser. 

254. Defendants Taing and Touzi Capital, with scienter, employed devices, 

schemes and artifices to defraud; with scienter or negligence, obtained money or 

property by means of untrue statements of a material fact or by omitting to state a 

material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and, with scienter or 

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negligence, engaged in transactions, practices, or courses of business which operated 

or would operate as a fraud or deceit upon the purchaser. 

255. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital violated, and unless restrained and enjoined will continue to violate, 

Section 17(a) of the Securities Act, 15 U.S.C. §§ 77q(a). 

THIRD CLAIM FOR RELIEF 

Unregistered Offer and Sale of Securities 

Violations of Sections 5(a) and 5(c) of the Securities Act 

(against Defendants Taing and Touzi Capital) 

256. The SEC realleges and incorporates by reference paragraphs 1 through 

246 above. 

257. Defendants Taing and Touzi Capital directly and indirectly offered and 

sold securities in the BTC Funds, PECC Funds, and PECC Notes in offerings that 

were not registered with the SEC and that were not subject to a valid exemption to 

registration. 

258. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital, directly or indirectly, singly and in concert with others, has made use 

of the means or instruments of transportation or communication in interstate 

commerce, or of the mails, to offer to sell or to sell securities, or carried or caused to 

be carried through the mails or in interstate commerce, by means or instruments of 

transportation, securities for the purpose of sale or for delivery after sale, when no 

registration statement had been filed or was in effect as to such securities, and when 

no exemption from registration was applicable.  

259. By engaging in the conduct described above, Defendants Taing and 

Touzi Capital each violated, and unless restrained and enjoined, will continue to 

violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).  

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

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I. 

Issue findings of fact and conclusions of law that Defendants committed the 

alleged violations. 

II. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Taing and Touzi Capital and their officers, 

agents, servants, employees and attorneys, and those persons in active concert or 

participation with any of them, who receive actual notice of the judgment by personal 

service or otherwise, and each of them, from violating Sections 5(a), 5(c), and 17(a) 

of the Securities Act [15 U.S.C. §77e(a), 77e(c), and 77q(a)], and Section 10(b) of the 

Exchange Act [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-

5]. 

III. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Taing from directly or indirectly, including 

but not limited to, through any entity owned or controlled by Taing, participating in 

the issuance, purchase, offer, or sale of any securities, provided, however, that such 

injunction shall not prevent him from purchasing or selling securities for his own 

personal account. 

IV. 

Enter an order against Defendant Taing pursuant to Section 20(e) of the 

Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 

U.S.C. § 78u(d)(2)] prohibiting him from acting as an officer or director of any issuer 

that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 

U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the 

Exchange Act, 78 U.S.C. § 78o(d). 

V. 

Order Defendants Taing and Touzi Capital to disgorge all funds received from 

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their illegal conduct, together with prejudgment interest thereon pursuant to 

Exchange Act Sections 21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 

78u(d)(5) and 78u(d)(7)]. 

VI. 

Order Defendants to pay civil penalties under Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]. 

VII. 

Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure in order to implement and carry out the terms of 

all orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within the jurisdiction of this Court. 

VIII. 

Grant such other and further relief as this Court may determine to be just and 

necessary.  

Dated:  November 20, 2024  

 /s/ Jasmine M. Starr 
JASMINE M. STARR 
PETER F. DEL GRECO 
Attorneys for Plaintiff 
Securities and Exchange Commission 

 

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