SEC Alleges $22M Crypto Mining Scheme Paid 13% to Operations

Investor money instead went to marketing and Shaikh's personal expenses, the SEC said. About $7 million of the $22 million was spent on advertising to attract new investors. Shaikh also spent roughly $500,000 on unrelated business ventures. From the investor pool, the complaint says he used $375,575 for real estate charges, $151,750 at a car dealership, $118,585 in cash withdrawals and $76,547 on entertainment. Another $778,550 was transferred to bank accounts owned by Shaikh.

The SEC is seeking disgorgement, penalties and bans on Shaikh from securities activities or corporate roles.

The case follows a pattern the SEC has pursued against other crypto mining schemes. In 2023, the agency charged Trade Coin Club with operating a $295 million Ponzi scheme that also promised mining returns. The regulator has made crypto-related fraud enforcement a priority, bringing more than 100 actions since 2021.

Mining Automatic operated from Massachusetts, raising money between 2023 and 2025. The SEC did not name a specific coin or mining operation tied to the company.