Crypto Mining Scam! $22 Million Swiped by Shaikh, Investors Left in Dust!

SEC v. Zan Shaikh and Bright Vision Distribution LLC, d/b/a Mining Automatic — U.S. Securities and Exchange Commission Litigation Release No. 26590, dated July 20, 2026.

The SEC charged Zan Shaikh and his company, Mining Automatic, for defrauding over 380 investors out of approximately $22 million. They promised guaranteed returns from crypto mining but instead misused funds for marketing and personal expenses, ultimately failing to make promised payments.

In Plain English

Imagine you gave money to someone who promised to invest it in a special money-making machine for you. They said they'd give you a steady profit every month. But instead of using your money for the machine, they spent most of it on advertising and their own shopping trips. When you didn't get your promised profits, they made excuses. The SEC stepped in to stop this and get money back for the people who were tricked.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Promise of Guaranteed Returns Between June 2023 and May 2025, Zan Shaikh and his company, Mining Automatic, solicited investments by promising investors guaranteed monthly returns, typically around 3%, from crypto asset mining operations.
2. Investment Agreements Investors signed 'Mining Automatic Agreements,' typically paying a fixed upfront amount. The agreements stated Mining Automatic would install crypto asset mining equipment, and investors would receive 80% of profits for five years, with Mining Automatic taking 20%.
3. Misrepresentation of Experience Shaikh and Mining Automatic allegedly misrepresented their experience, expertise, and track record in crypto asset mining to potential investors, creating a false sense of security.
4. Misuse of Funds Despite promises to use investor funds for crypto asset mining, Shaikh and Mining Automatic allegedly used only about 13% of the approximately $22 million raised for mining expenses.
5. Personal Enrichment The majority of investor funds were allegedly used for marketing to solicit new investors and for Shaikh's personal and unrelated business expenses, including real estate, cars, meals, travel, and luxury goods.
6. Failure to Make Payments Many investors initially received payments that were presented as profits or complimentary payments. However, by March 2025, Defendants stopped making payments to investors, citing purported reasons for the delays.
7. Ponzi Scheme Characteristics The scheme exhibited characteristics of a Ponzi scheme, as payments made to some investors were funded by new investor contributions rather than actual profits generated from the mining operations.
8. SEC Charges Filed On July 20, 2026, the SEC filed partially settled charges against Shaikh and Mining Automatic in the U.S. District Court for the District of Massachusetts, alleging violations of securities laws.

The Enforcement Action

On July 20, 2026, the Securities and Exchange Commission filed partially settled charges against Zan Shaikh and his company, Mining Automatic, alleging they misappropriated and misused investor funds raised in a fraudulent crypto asset mining scheme. The defendants raised approximately $22 million from over 380 investors. The SEC's complaint alleges that Shaikh and Mining Automatic used only about 13% of investor funds on crypto asset mining expenses, instead using the majority for marketing and personal expenses. Shaikh and Mining Automatic consented to judgments that would permanently enjoin them from violating securities laws, impose an officer and director bar against Shaikh, and require them to pay disgorgement, prejudgment interest, and civil penalties, with the amounts to be determined by the Court.

Named in this action: Zan Shaikh and Bright Vision Distribution LLC, d/b/a Mining Automatic.

Original SEC litigation release ↗ · Browse all cases