SEC charges Mining Automatic and owner Zan Shaikh with raising $22M from 380+ investors via a fraudulent crypto mining scheme. Only 13% went to mining costs.
CNA FINANCIAL CORP currently carries an Alpha Score of n/a, giving AlphaScala's model a neutral read on the setup.
The U.S. Securities and Exchange Commission has sued Mining Automatic and its owner, Zan Shaikh, after they allegedly raised about $22 million from more than 380 investors through a fraudulent crypto mining operation.
The SEC announced the partially settled charges on July 20, accusing the Florida resident and his company, legally registered as Bright Vision Distribution LLC, of misusing investor money while promoting guaranteed monthly returns.
Filed in the U.S. District Court for the District of Massachusetts, the complaint covers conduct between June 2023 and May 2025. According to the regulator, Shaikh presented Mining Automatic as an experienced crypto mining business capable of generating steady income for its customers.
Investors were allegedly told their money would fund computing resources used to validate transactions on crypto networks. In return for providing this processing power, miners can receive crypto assets as rewards, creating the revenue that Mining Automatic claimed would support monthly payments.
Yet the SEC alleges the operation could not produce enough mining income to meet those promises. When payments became overdue, Shaikh and Mining Automatic allegedly gave investors misleading explanations about the cause of the delays and the condition of the business.
Only about 13% of the money raised went toward costs linked to the claimed mining operation, according to the SEC's complaint. Much of the remaining capital was allegedly spent on marketing campaigns designed to attract more investors, along with Shaikh's personal costs and expenses tied to unrelated businesses.
The regulator also accused the defendants of making false claims about their mining experience, technical knowledge and previous results. Other alleged misrepresentations covered how investor funds would be used and whether the mining infrastructure was operating as described.
Based on the complaint, Mining Automatic received at least $20 million more from investors than it returned to them. The figure leaves most of the roughly $22 million raised unaccounted for through investor repayments, according to the agency's calculations.
SEC officials charged Shaikh and Mining Automatic with violating the registration and antifraud provisions of the Securities Act of 1933. The complaint also alleges breaches of the Securities Exchange Act of 1934 and Rule 10b-5, which prohibit fraud in connection with securities transactions.
Shaikh and Mining Automatic have consented to court judgments without the SEC's release stating that they admitted or denied the allegations. Subject to judicial approval, the proposed orders would permanently bar both defendants from committing the cited securities-law violations.
Under the proposed settlement, Shaikh would also receive an officer-and-director ban and a conduct-based injunction. Disgorgement, prejudgment interest and civil penalties will be decided later by the court following a motion from the SEC.
The agency's Cyber and Emerging Technologies Unit investigated the case alongside staff from its Boston Regional Office. SEC officials Joy Guo, Sejal Bhakta, Amy Gwiazda, Mark Albers and Kathleen Shields conducted the investigation under the supervision of Laura D'Allaird, while Shields will lead the litigation.
Mining Automatic is the latest crypto investment operation to face a U.S. civil enforcement case. Earlier in July, the Commodity Futures Trading Commission sued North Carolina resident Trevor Vernon and Argent Capital Management LLC over an alleged $14 million commodity pool fraud.
According to the CFTC's July 7 announcement, Vernon and Argent Capital raised money from at least 60 participants between March 2022 and February 2026. The pool traded equity-index futures, options on those futures, Bitcoin, Ether and other crypto assets.
The CFTC alleged that Vernon presented himself as a successful trader and told potential participants that the investment pool had recorded strong gains. Its lawsuit focuses on claims made while soliciting investors and the handling of the funds collected from them.
Crypto mining schemes have produced different outcomes in recent U.S. cases. Crypto.news reported this month that the Department of Justice had moved to dismiss its criminal case against the founder of BitClub Network, despite allegations that the mining operation defrauded investors of $722 million.
Outside the U.S., Taiwan's Shilin District Court recently sentenced the alleged mastermind of the BitShine crypto exchange to 22 years in prison. Taiwan's semi-official Central News Agency identified the defendant by the surname Shih and reported that the court convicted him of running illegal virtual asset services, fraud and money laundering.
Court findings cited by CNA showed that the group used BitShine's appearance as a registered crypto business to conceal criminal activity. Prosecutors alleged that the operation worked with fraud syndicates and people linked to the Thento Union, a major organized crime group in Taiwan.
Investigators estimated that more than $71 million was laundered between January 2024 and April 2025, partly by converting victims' cash into Tether's USDT before sending it overseas. CNA reported that prosecutors identified 1,539 victims whose combined losses exceeded $39 million.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.