Ponzi

Vision

Chair

The US Securities and Exchange Commission (SEC) has sued crypto mining investment business Mining Automatic and its founder, Zan Shaikh, alleging they raised $22 million from investors while spending only about 13% of the funds on mining operations.
Mining Automatic was operated by Massachusetts-based Bright Vision Distribution LLC, which the SEC said raised the money from more than 380 investors between June 2023 and May 2025.
The company allegedly promised guaranteed monthly returns from crypto asset mining despite operating a business that could not generate the advertised payouts. The SEC said investor money was instead used for marketing, personal expenses and unrelated ventures.
According to the complaint, the operation generated about $1.1 million from mining while paying 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 also allegedly spent about $7 million on advertising to attract new investors, while Shaikh used investor funds for real estate, vehicles, entertainment and transfers to his personal bank accounts.
Related: <a href="https://cointelegraph.com/news/white-house-request-cftc-sec-nominations-democrats" rel="noopener noreferrer nofollow">White House says it received no Democratic response related to SEC, CFTC vacancies</a>
Mining Automatic stopped paying investors by March 2025, and 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, along with orders barring Shaikh from selling securities or serving as an officer or director of a public company.<img alt="" height="853" src="https://s3-images.ctmedia.io/media/content/screenshot-2026-07-20-at-14024-pm.png" width="1306">
SEC complaint against Mining Automatic. Source: <a href="https://www.sec.gov/files/litigation/complaints/2026/comp26590.pdf" rel="noopener noreferrer nofollow">SEC</a>
<h2 id="sec-shifts-crypto-focus-toward-rulemaking">SEC shifts crypto focus toward rulemaking</h2>
The lawsuit comes as the SEC has increasingly emphasized developing clearer rules for digital assets under Chair Paul Atkins. In June, the agency published its <a href="https://cointelegraph.com/news/sec-makes-digital-assets-strategic-priority-through-2030" rel="noopener noreferrer nofollow">2026–2030 Strategic Plan</a>, identifying blockchain technology, tokenization and crypto market infrastructure as long-term priorities while reaffirming its investor protection mandate.
The SEC expanded on that approach in July with its <a href="https://cointelegraph.com/news/sec-crypto-rule-changes-2026-agenda" rel="noopener noreferrer nofollow">2026 rulemaking agenda</a>, proposing new rules for crypto broker-dealers, digital assets traded on national securities exchanges and alternative trading systems, and potential exemptions and safe harbors for certain digital asset offerings.
The regulatory push coincides with congressional efforts to reshape <a href="https://cointelegraph.com/magazine/will-the-us-get-finally-clarity-this-week-bitcoin-80k-hodlers-digest" rel="noopener noreferrer nofollow">US crypto oversight</a> through the Digital Asset Market Clarity Act, which would clarify the respective roles of the SEC and Commodity Futures Trading Commission (CFTC), if enacted. The bill is expected to face a key Senate vote before lawmakers begin their August recess.
Magazine: <a href="https://cointelegraph.com/magazine/peter-brandt-says-bitcoins-bear-market-isnt-over-predicts-final-bottom-in-october" rel="noopener noreferrer nofollow">Peter Brandt predicts the exact day Bitcoin’s bear market will be over</a>

SEC sues Mining Automatic and founder over alleged $22M crypto mining scheme

Table of Contents

Cointelegraph

Other articles published on Jul 20, 2026

Join our free newsletter for daily crypto updates!