BlockBeats report: On July 21, the U.S. Securities and Exchange Commission (SEC) announced it has filed a lawsuit against Zan Shaikh, a resident of Florida, and his company Mining Automatic, accusing them of raising approximately $22 million from over 380 investors through a fraudulent cryptocurrency mining investment scheme and allegedly misappropriating investor funds.
The SEC stated that, between June 2023 and May 2025, the defendants promised investors guaranteed monthly returns through cryptocurrency mining, but actually allocated only about 13% of the raised funds to the so-called mining operations, with the remainder primarily used for marketing, attracting new investors, and paying personal and other unrelated expenses. The SEC noted that the defendants raised at least $20 million more than they returned to investors.
The SEC has alleged violations of the anti-fraud and securities registration provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Both parties have agreed to accept a permanent injunction, subject to court approval, with the amount of disgorgement of ill-gotten gains, interest, and civil penalties to be determined by the court.