SEC charges Florida man and company in alleged $22 million crypto mining fraud scheme

The Securities and Exchange Commission has filed partially settled charges against Zan Shaikh and his company for allegedly defrauding investors with a crypto mining scheme.

According to a Monday statement, the agency accuses the Florida resident and his company, Mining Automatic, of raising roughly $22 million from more than 380 investors in a fraudulent crypto asset mining scheme.

The SEC alleges that between approximately June 2023 and May 2025, Shaikh and Mining Automatic promised investors guaranteed monthly returns from a purported crypto asset mining operation. Its complaint states that the operation was unable to generate the promised returns. 

"Despite their representations that they would use investors' funds 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 statement said.

Furthermore, 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.

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.