SEC says alleged $22M Bitcoin mining scheme spent only 13% on mining

Bitcoin investors looking at mining offers have a new fraud case to watch. The US Securities and Exchange Commission says a venture marketed as a Bitcoin mining business raised about $22 million from more than 380 investors, but put only 13% of that money into the mining operation it promoted.

On July 20, the SEC filed partially settled charges against Zan Shaikh and Bright Vision Distribution LLC, which did business as Mining Automatic. The complaint says the defendants promised guaranteed monthly returns from about June 2023 to May 2025, even though the mining setup was not capable of producing those returns. The SEC also alleges they took in at least $20 million more than they repaid.

According to the filing, most investor funds went to marketing to bring in new investors, along with Shaikh's personal spending and unrelated business costs. Shaikh and Mining Automatic agreed to proposed permanent injunctions, subject to court approval. Shaikh also agreed to an officer-and-director bar and a conduct-based injunction.

Recovery is still unclear. The FBI's Boston Division is also seeking potential victims tied to Shaikh, Bright Vision Distribution, YT Automatic, Mining Automatic, RankOne Ecommerce, and Replic8. The agency says responses may support the investigation, but it has not said whether investors will recover funds.