The Securities and Exchange Commission sued Mining Automatic, a Florida-based crypto mining company, and its founder, Zan Shaikh, on July 20, 2026, according to an SEC complaint filed in the U.S. District Court for the District of Massachusetts, alleging the company raised $22 million from more than 380 investors while spending only about 13% of the funds on actual crypto mining. Shaikh ran the operation under the registered name Bright Vision Distribution LLC and pitched it as an experienced mining business capable of paying steady monthly returns.
Source: SEC | Complaint against Mining Automatic
What the SEC Is Alleging
The complaint accuses Shaikh of promising returns his mining operation could not realistically produce, while alleging that investor funds were not used as promised. According to the SEC, investors are still owed at least $20 million, and the case adds to a growing number of enforcement actions against crypto mining and staking platforms accused of using money from new investors to pay earlier promises.
How the Alleged Scheme Worked
Between June 2023 and May 2025, Shaikh told investors that Mining Automatic ran a crypto mining operation experienced enough to fund steady monthly payouts, the SEC’s complaint states. Crypto mining works by dedicating computing power to validate transactions on a blockchain network, and miners earn crypto assets as a reward for that work. Shaikh allegedly used this pitch to bring in deposits, then gave investors misleading explanations when the promised payments came late or stopped.
Only about 13% of the $22 million raised went toward mining-related expenses, according to the SEC. The agency says the rest funded marketing campaigns aimed at recruiting new investors, along with personal and unrelated business costs for Shaikh. Regulators allege Mining Automatic took in at least $20 million more than it has repaid, a gap the SEC says came from using new investor money to cover payments owed to earlier ones.
What This Means for Crypto Investors
Guaranteed monthly returns tied to mining or staking services are one of the clearest warning signs regulators point to in crypto investment cases, and Mining Automatic is the latest company accused of using new deposits to keep older promises afloat. You can check our coverage about the mistakes that can cost you in crypto investing if you’re weighing a similar investment. For more on cases like this one, see the case of the money laundering kingpin tied to a similar fraud structure.
The Court Approval That Sets the Penalty
Shaikh and Mining Automatic have agreed to settle, but a judge in Massachusetts still has to approve it. Once that happens, the court will decide exactly how much they owe in disgorgement, prejudgment interest, and civil penalties, after the SEC files a motion asking for specific amounts. Shaikh also faces a permanent ban from serving as an officer or director of a public company, along with a separate injunction barring the kind of conduct he’s accused of here, a case that Kathleen Shields of the SEC’s Boston Regional Office is leading.
This article is for informational purposes only and does not constitute financial advice. Do your own research before making any investment decisions.
What this means for you: If a crypto mining or staking platform promises fixed monthly returns no matter what the market does, treat that guarantee as a warning sign, not a selling point, since real mining income depends on the price of the underlying crypto and the cost of electricity, and both of those change from month to month, so real returns rise and fall instead of staying the same.
