SEC Sues Mining Automatic Over $22M Crypto Mining Fraud Scheme

According to the SEC, the agency has filed a lawsuit against Mining Automatic and founder Zan Shaikh, alleging the Massachusetts-based operation raised $22 million from 380 investors between 2023 and 2025 under false pretenses. The regulator claims only about 13% of funds went toward actual crypto mining operations, which generated roughly $1.1 million while paying out $1.8 million to investors, creating Ponzi-like characteristics.

The SEC alleges approximately $7 million was spent on marketing and advertising to attract new investors, with additional funds diverted to Shaikh's personal expenses including real estate charges ($375,575), a car dealership ($151,750), and entertainment ($76,547). Payments halted by March 2025, leaving over $20 million in principal unpaid across all investors. The SEC seeks disgorgement, penalties, and bans on Shaikh from securities activities.