Mining money into your pocket》SEC sues crypto mining firms; it raised $22 million but only used 13% to mine

The U.S. SEC has charged Massachusetts crypto mining investment company Mining Automatic and its founder Zan Shaikh, alleging that they raised $22 million from 380 investors but only invested 13% of the funds into actual mining operations; the remaining money was used for advertising, real estate purchases, and personal spending, with the scheme showing features of a Ponzi scheme.
(Background: Big news! The U.S. SEC classifies Bitcoin mining under securities law, suing mining firm VBit for a $95.6 million scam)
(Background add-on: Raising $1.9 billion》U.S. Department of Justice and the SEC sue HyperFund over a crypto mining Ponzi scheme)

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• Fundraising $22 million, mining only gets 13%
• $7 million for advertising and the founder’s personal spending
• SEC advances 2026-2030 strategic plan
• Relief SEC is seeking

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit on July 20 against Massachusetts crypto mining investment company Mining Automatic and its founder Zan Shaikh, alleging that they raised $22 million from more than 380 investors but only put about 13% of the funds into actual mining operations. Details disclosed in the SEC’s complaint show that the money flowed more toward advertising and marketing, as well as the founder’s personal consumption.

Fundraising $22 million, mining only gets 13%

Mining Automatic is actually operated through Bright Vision Distribution LLC in Massachusetts. According to the complaint, the company promised investors steady monthly crypto-mining returns between June 2023 and May 2025, but the mining business it operated could not support the levels of returns claimed in its promotion.

The complaint shows that Mining Automatic actually earned about $1.1 million through mining, yet paid investors approximately $1.8 million of so-called “returns,” with the $700k shortfall coming from the principal of new investors.

The SEC said this gave Mining Automatic “some characteristics of a Ponzi scheme.”

$7 million for advertising and the founder’s personal spending

Mining Automatic spent about $7 million on advertising to attract new investors. Shaikh, meanwhile, used investor funds to buy real estate, vehicles, entertainment expenses, and transferred money into personal bank accounts.

By March 2025, Mining Automatic stopped paying returns to investors. According to the SEC, all investors still had not recovered their original principal, and more than $20 million in principal remained outstanding.

SEC advances 2026-2030 strategic plan

This case also reflects the SEC’s enforcement direction on crypto under Chairman Paul Atkins. In June this year, the SEC released its 2026-2030 strategic plan, listing blockchain technology, tokenization, and crypto market infrastructure as long-term priorities, while reiterating its mission to protect investors.

In July, the SEC published its 2026 legislative agenda, proposing new rules targeting crypto brokers, digital assets traded on national securities exchanges, and alternative trading systems, and also providing exemptions and safe harbors for some digital assets.

At the same time, the U.S. Congress is also moving forward with the “Digital Asset Market Structure Clarity Act,” aiming to clarify the respective jurisdictions of the SEC and the Commodity Futures Trading Commission (CFTC). The bill is expected to undergo a key Senate vote before lawmakers adjourn in August.

Relief SEC is seeking

In this case, the SEC is seeking disgorgement of the alleged ill-gotten gains, the payment of civil penalties, and the acceptance of a permanent injunction. It is also seeking to bar Shaikh from selling securities or serving in management or director positions at public companies.