The U.S. SEC has sued crypto mining firm Mining Automatic and its owner Zan Shaikh for allegedly collecting more than $22 million from over 380 investors for the purpose of mining, while spending only a fraction of it on actual crypto mining.
The SEC alleges that Mining Automatic spent only about 13% of the funds raised on actual mining operations. The lawsuit claims that the operation raised the funds between June 2023 and May 2025 and generated approximately $1.1 million from mining while paying out around $1.8 million in purported returns.
According to the SEC, more than $20 million in principal remains unpaid to investors. The agency alleges that the remaining funds were utilized for marketing, personal expenses, and unrelated ventures, with about $7 million reportedly spent on advertising to attract new investors.
Shaikh, a Florida resident, ran the operation under the company name Bright Vision Distribution LLC. The SEC claims that when payments began to arrive late, Shaikh provided misleading explanations for the delays and misrepresented the business’s operations.
The SEC charged Shaikh and Mining Automatic with violating the registration and antifraud provisions of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The agency is seeking disgorgement, civil penalties, and permanent injunctions against Shaikh.
Both defendants have agreed to settle part of the case without admitting or denying the allegations, pending a judge’s approval. Shaikh would face an officer-and-director ban in addition to a conduct-based injunction, with the court to set the dollar amounts for disgorgement and penalties later.
The SEC’s Cyber and Emerging Technologies Unit led the investigation, which highlights ongoing enforcement actions against crypto investment operators amid growing scrutiny in the sector.
