Full story
SEC targets Mining Automatic
The U.S. Securities and Exchange Commission sued crypto mining investment business Mining Automatic and its founder, Zan Shaikh, alleging they raised $22 million from investors while spending only about 13% of the funds on mining operations.
“The SEC said investor money was instead used for marketing, personal expenses and unrelated ventures.”
The SEC said Mining Automatic was operated by Massachusetts-based Bright Vision Distribution LLC and raised the money from more than 380 investors between June 2023 and May 2025 by promoting guaranteed monthly returns from crypto asset mining.
The regulator alleged the operation generated about $1.1 million from mining while paying investors roughly $1.8 million in purported returns, and it said the shortfall meant some payments were funded with money from other investors, “some of the hallmarks of a Ponzi scheme.”
The SEC said Mining Automatic stopped paying investors by March 2025 and that none had recovered their original investment, while more than $20 million in principal remains unpaid, according to the complaint.
Partially settled charges
On July 20, 2026, the SEC filed partially settled charges against Zan Shaikh, a Florida resident, and his company Mining Automatic, alleging they misappropriated and misused investor funds after raising approximately $22 million from more than 380 investors.
The SEC said the complaint, filed in the United States District Court for the District of Massachusetts, alleged that between approximately June 2023 and May 2025 Shaikh and Mining Automatic promised investors guaranteed monthly returns from a purported crypto asset mining operation that was insufficient to generate the promised returns.
According to the SEC’s complaint, Shaikh and Mining Automatic consented to judgments, subject to court approval, that would permanently enjoin them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The proposed judgments would also impose an officer and director bar and a conduct based injunction against Shaikh, while disgorgement, prejudgment interest, and civil penalties would be determined by the court upon motion by the Commission.
Rulemaking and oversight
The Mining Automatic lawsuit comes as the SEC increasingly emphasized developing clearer rules for digital assets under Chair Paul Atkins, with the agency publishing its 2026–2030 Strategic Plan in June.
“under Chair Paul Atkins”
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), if enacted.
The bill is expected to face a key Senate vote before lawmakers begin their August recess, while the SEC’s complaint against Mining Automatic seeks 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.
