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SEC alleges $22M Bitcoin scheme spent 13 cents per dollar on mining

The SEC says investor money was largely used for marketing and personal and unrelated business expenses, with any investor recovery still unknown pending court approval.

Reported · Written up by our desk · Market Structure

A US-based crypto mining venture raised about $22 million from more than 380 investors, then, according to the US Securities and Exchange Commission, spent just 13 cents of every dollar on its purported mining operation.

The SEC filed partially settled charges on July 20 against Zan Shaikh and Bright Vision Distribution LLC, doing business as Mining Automatic. The regulator alleges the defendants promised guaranteed monthly returns of roughly between June 2023 and May 2025 even though the purported mining operation was not set up to generate those levels.

According to the SEC complaint, the defendants took in at least $20 million more than they repaid to investors. The agency says investor funds were used largely for marketing to solicit new investors, along with Shaikh’s personal expenses and unrelated business expenses.

Shaikh and Mining Automatic agreed to proposed permanent injunctions, subject to court approval, including an officer-and-director bar and conduct-based injunction. The SEC says the specific amounts for disgorgement, prejudgment interest, and civil penalties would be determined later on an SEC motion, while any distribution or recovery for investors remains unannounced and uncertain; the FBI is also seeking potential victims through a voluntary information request.

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