TLDR
- The SEC has sued Mining Automatic and founder Zan Shaikh over an alleged $22 million crypto fraud scheme
- Only about 13% of investor funds were spent on actual mining operations
- Over 380 investors were affected, with more than $20 million in principal still unpaid
- The scheme showed hallmarks of a Ponzi, with some investor returns funded by new investor money
- Shaikh allegedly used funds for real estate, vehicles, and personal expenses
The US Securities and Exchange Commission has filed charges against crypto mining company Mining Automatic and its founder Zan Shaikh. The agency alleges the pair raised $22 million from investors through a fraudulent crypto mining operation.
JUST IN: The SEC has sued Mining Automatic for allegedly defrauding over 380 investors out of $22 MILLION through a crypto mining scheme.
The company raised funds from June 2023 to May 2025 but spent only 13% on actual mining operations.
The remaining funds were allegedly… pic.twitter.com/VIv8QL8BqR
— Coin Bureau (@coinbureau) July 20, 2026
Mining Automatic was operated through Massachusetts-based Bright Vision Distribution LLC. The company raised money from more than 380 investors between June 2023 and May 2025.
The SEC says the company promised investors guaranteed monthly returns from crypto mining. But the operation could not deliver on those promises.
Of the $22 million raised, only about 13% went toward actual mining expenses. The rest was spent elsewhere, according to the complaint.
The mining operation generated roughly $1.1 million in revenue while paying out around $1.8 million to investors. The gap between earnings and payouts was covered using money from new investors.
The SEC said this gave the scheme “some of the hallmarks of a Ponzi scheme.” Payments to existing investors were being funded by money raised from new ones.
Where the Money Went
About $7 million of investor funds went toward advertising and marketing to attract new investors. Shaikh also allegedly used funds for personal real estate, vehicles, and entertainment.
Money was also transferred directly to Shaikh’s personal bank accounts, according to the complaint. The SEC said he made false claims about his experience, expertise, and track record in crypto mining.
Mining Automatic stopped paying investors by March 2025. No investor has recovered their original investment, and more than $20 million in principal remains unpaid.
The SEC has charged both Shaikh and Mining Automatic with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.
What Happens Next
Both Shaikh and Mining Automatic have agreed to judgments that would permanently ban them from future violations of those provisions. The SEC is also seeking disgorgement of profits, civil penalties, and permanent injunctions.
Shaikh faces additional orders that would bar him from selling securities or serving as an officer or director of a public company.
The case comes as the SEC has been working to build clearer rules for digital assets under Chair Paul Atkins. The agency published a 2026–2030 Strategic Plan in June, listing blockchain and crypto market infrastructure as priorities.
In July, the SEC released a 2026 rulemaking agenda covering crypto broker-dealers and digital asset exchanges. Congress is also working on the Digital Asset Market Clarity Act, which could clarify oversight roles between the SEC and CFTC.
A Senate vote on that bill is expected before the August recess.
