SEC Charges Florida Man and Company in $22 Million Crypto Mining Fraud Scheme
The U.S. Securities and Exchange Commission (SEC) has filed partially settled charges against Zan Shaikh and his company, Mining Automatic, for allegedly running a fraudulent crypto mining operation.
Key Details of the Case
According to the SEC, Shaikh and Mining Automatic raised approximately $22 million from more than 380 investors between June 2023 and May 2025. The duo promised guaranteed monthly returns from crypto asset mining.
However, the operation failed to deliver the promised profits. The SEC claims that only about 13% of the investor funds were actually used for crypto mining expenses.
Misuse of Investor Funds
The complaint states that Shaikh and his company used most of the money for other purposes. They spent heavily on marketing to attract new investors and covered Shaikh’s personal and unrelated business expenses.
The SEC also alleges that the defendants took in at least $20 million more than they repaid to investors.
False Claims and Misrepresentations
Authorities say Shaikh and Mining Automatic made several false statements. These included:
- Their experience and expertise in crypto mining
- How investor funds would be used
- The actual status of mining operations
- Reasons for failing to make monthly payments
SEC Legal Action
The SEC has charged both Zan Shaikh and Mining Automatic with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.
As part of a partial settlement, the defendants have agreed to judgments that permanently ban them from future violations of these securities laws.
This case highlights the ongoing risks in crypto investment schemes and the SEC’s continued focus on protecting investors from fraud in the digital asset space.
