SEC Charges Florida Man in Alleged $22 Million Crypto Mining Fraud Scheme

The Securities and Exchange Commission filed partially settled charges against Florida resident Zan Shaikh and his company Mining Automatic for allegedly defrauding investors in a crypto mining scheme. According to a Monday statement, the SEC accuses Shaikh and Mining Automatic of raising roughly $22 million from more than 380 investors between approximately June 2023 and May 2025 by promising guaranteed monthly returns from a purported crypto asset mining operation. The complaint states the operation was unable to generate the promised returns, prompting enforcement action under the Securities Act of 1933 and the Securities Exchange Act of 1934.

SEC Alleges Misrepresentations and Fund Misuse in Mining Operation

The SEC alleges that Shaikh and Mining Automatic promised investors guaranteed monthly returns from a purported crypto asset mining operation. The complaint states that despite representations that investors' funds would be used to engage in crypto asset mining, Shaikh and Mining Automatic used only about 13% of investors' funds on expenses relating to purported crypto asset mining.

The SEC said that Shaikh and Mining Automatic made misrepresentations regarding their experience, expertise, and track record in crypto asset mining; the uses of investor funds; the status of the mining operations; and the reasons they could not make monthly payments when they were due. The complaint also states they took in at least $20 million more than they repaid investors, using the funds primarily for marketing to recruit new investors and covering Shaikh's personal and unrelated business expenses.

Shaikh and Mining Automatic Consent to Permanent Injunction

The complaint charges Shaikh and Mining Automatic with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. Shaikh and Mining Automatic have consented to the entry of judgments that would permanently enjoin them from future violations of those provisions.

FAQ

What did the SEC charge Zan Shaikh and Mining Automatic with?

The SEC filed partially settled charges against Zan Shaikh and Mining Automatic for allegedly defrauding investors in a crypto mining scheme. The complaint charges them with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.

How much money did Shaikh and Mining Automatic allegedly raise from investors?

According to the SEC statement, Shaikh and Mining Automatic raised roughly $22 million from more than 380 investors between approximately June 2023 and May 2025.

What percentage of investor funds was used for crypto mining expenses?

The SEC alleges that Shaikh and Mining Automatic used only about 13% of investors' funds on expenses relating to purported crypto asset mining, despite representations that the funds would be used to engage in crypto asset mining.