Key Insights
- The US SEC has charged Automatic Mining and Zan Shaikh over a fraudulent crypto mining scheme.
- The financial regulator alleges that the firm misappropriated and misused around $22 million raised from investors.
- This represents one of the few enforcement cases the financial agency has brought under Paul Atkins.
The US Securities and Exchange Commission (SEC) has charged a Florida resident, Zan Shaikh, and his company, Bright Vision LLC. The SEC disclosed this today, noting that the company, which was operating as Mining Automatic, and Shaikh ran a crypto mining fraud.
The regulator filed the complaint in the District Court for the District of Massachusetts, noting that the charges have been partially settled.
SEC Alleges Shaikh Misappropriated Over $20 Million in Crypto Mining Investment Fraud
According to the SEC, Shaikh and his company raised approximately $22 milion from over 380 investors in a crypto mining investment scheme and misappropriated the funds. $16 million came from new investors, while $7 million came from those who invested in other failed enterprises by Shaikh.
The SEC report alleged that Shaikh ran the fraudulent scheme from June 2023 to May 2025. He claimed to be investing in a crypto mining operation and promised investors guaranteed monthly returns.
However, the agency noted that Shaikh and Mining Automatic made several misrepresentations to investors about their experience and track record. They also lied about using investors’ money.
Only 13% of the funds went towards the mining operations, while the majority was spent on marketing expenses to attract new investors and on Shaikh’s personal expenses.
In its complaint, the SEC noted that the defendants violated several securities laws and is now seeking an injunction to restrain them from continuing their business. It also seeks to bar Shaikh from serving as an officer or director of certain public companies.
Interestingly, the defendant has already consented to this judgment, which means it only requires the court’s approval. However, the SEC is also seeking disgorgement, civil penalties, and prejudgment interest, which the court would determine.
SEC Focuses on Clear Violations in Crypto Lawsuits Under Atkins
Meanwhile, the lawsuit highlights how the SEC has changed its approach to crypto enforcement actions since Trump appointed Paul Atkins as the SEC Chair.
Instead of the aggressive enforcement actions targeting multiple crypto firms under Gary Gensler, the regulator has now adopted a collaborative approach. This led the regulator to drop several cases against crypto companies in 2025.
It has now focused on issuing guidance for the digital asset industry. At the same time, crypto-related enforcement actions now target clear fraudulent acts such as Ponzi schemes, rug pulls, and other investment frauds.
Interestingly, while the change in the SEC’s approach has provided greater regulatory clarity, it has not had a similar impact on crypto market performance. Many stakeholders believe the CLARITY Act is necessary to codify these regulatory improvements and ensure another administration does not change the policy on crypto.
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