SEC Sues Mining Automatic Founder Over $22M Crypto Mining Scheme

The operation generated about $1.1 million from mining. It paid investors roughly $1.8 million in purported returns. The SEC alleged the shortfall meant some payments were funded with money from other investors, giving the scheme “some of the hallmarks of a Ponzi scheme.”

Mining Automatic spent about $7 million on advertising to attract new investors. Shaikh used investor funds for real estate, vehicles, entertainment and transfers to his personal bank accounts, the SEC said.

By March 2025, Mining Automatic stopped paying investors. The SEC said none had recovered their original investment. More than $20 million in principal remains unpaid, according to the complaint.

The SEC is seeking disgorgement, civil penalties and permanent injunctions. It also wants orders barring Shaikh from selling securities or serving as an officer or director of a public company.