Overview
- The SEC filed suit on Monday accusing Mining Automatic and founder Zan Shaikh of raising about $22 million from more than 380 investors for a crypto‑mining business that largely did not exist.
- The complaint says only about 13% of investor funds went to actual mining, mining revenue totaled roughly $1.1 million, payouts were about $1.8 million, and more than $20 million in investor principal remains unpaid.
- The SEC describes the operation as showing hallmarks of a Ponzi scheme because new investor money was used to pay earlier investors and marketing and personal expenses consumed large shares of funds.
- Shaikh and Mining Automatic have consented to proposed judgments that would impose permanent injunctions and an officer‑and‑director bar if a court approves them, while disgorgement, interest and civil penalties will be set in later proceedings.
- The FBI’s Boston Division has opened a victim‑information portal to identify possible victims, and the case adds to heightened U.S. regulatory scrutiny and rulemaking on digital‑asset offerings that could affect future enforcement and investor protections.