SEC sues Mining Automatic for allegedly pocketing $22M while mining 13% of investor funds ⛏️

The US Securities and Exchange Commission has sued crypto mining investment firm Mining Automatic and its founder Zan Shaikh, alleging the operator raised $22 million from more than 380 investors while directing only about 13% of the proceeds to actual mining. Mining Automatic was run by Massachusetts-based Bright Vision Distribution LLC, which the SEC said sold the investments from June 2023 through May 2025 while promising guaranteed monthly returns from crypto asset mining.

According to the complaint, the operation generated roughly $1.1 million from mining while paying investors about $1.8 million in purported returns. The SEC said the shortfall meant some payments were funded with money from other investors, giving the scheme "some of the hallmarks of a Ponzi scheme." Investor money was instead used for marketing, personal expenses and unrelated ventures, with about $7 million spent on advertising to attract new investors. Shaikh allegedly used investor funds for real estate, vehicles, entertainment and transfers to his personal bank accounts.

Mining Automatic stopped paying investors by March 2025, and the SEC said none had recovered their original investment, leaving more than $20 million in principal unpaid. The agency is seeking disgorgement, civil penalties and permanent injunctions, along with orders barring Shaikh from selling securities or serving as an officer or director of a public company.

The lawsuit comes as the SEC has shifted its crypto focus toward rulemaking under Chair Paul Atkins. In June, the agency published its 2026–2030 Strategic Plan, identifying blockchain technology, tokenization and crypto market infrastructure as long-term priorities while reaffirming its investor protection mandate. In July, the SEC expanded on that approach with its 2026 rulemaking agenda, proposing new rules for crypto broker-dealers, digital assets traded on national securities exchanges and alternative trading systems, and potential exemptions and safe harbors for certain digital asset offerings.

The regulatory push coincides with congressional efforts to reshape US crypto oversight through the Digital Asset Market Clarity Act, which would clarify the respective roles of the SEC and Commodity Futures Trading Commission (CFTC). The bill is expected to face a key Senate vote before lawmakers begin their August recess.