SEC charges Mining Automatic in $22 million crypto mining scheme
The U.S. Securities and Exchange Commission (SEC) has filed charges against Mining Automatic and its founder, Zan Sheikh, accusing them of raising $22 million from investors under the guise of cryptocurrency mining investments. According to the regulator, only about 13% of the funds were actually used for digital asset mining operations.
According to the complaint, the company raised funds from more than 380 investors between June 2023 and May 2025 through Bright Vision Distribution LLC, a Massachusetts-registered entity.
SEC complaint against Mining Automatic. Source: SEC.
Mining Automatic promised investors guaranteed monthly returns generated from cryptocurrency mining. However, the company's actual business performance was insufficient to support the promised payouts.
Signs of a Ponzi scheme
The SEC stated that Mining Automatic generated approximately $1.1 million in mining-related revenue while paying investors around $1.8 million. The regulator believes that part of those payments came from funds provided by new investors.
According to the SEC, the company's operations exhibited "some hallmarks of a Ponzi scheme."
The complaint also alleges that approximately $7 million was spent on marketing campaigns designed to attract new investors. The SEC further claims that Sheikh used investor funds to purchase real estate and vehicles, pay for entertainment expenses, and transfer money to his personal bank accounts.
More than $20 million remains unpaid
By March 2025, Mining Automatic had stopped making payments to investors. According to the SEC, none of the participants in the scheme have recovered their original investments.
The amount of unrecovered investor funds currently exceeds $20 million.
The SEC is seeking disgorgement of ill-gotten gains, civil penalties, and a ban preventing Sheikh from participating in the sale of securities. The regulator is also requesting that he be prohibited from serving as an officer or director of any public company.
Meanwhile, the crypto mining industry continues to undergo structural changes. Earlier, Japanese company SBI Crypto announced that it will shut down its Bitcoin mining pool after five years of operation. The service will cease operations on July 31 and distribute its final payouts to participants.
Earlier, a solo miner successfully mined a Bitcoin block using a compact Bitaxe device worth approximately $150, earning a reward of roughly $200,000.
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