The United States Securities and Exchange Commission (SEC) filed partially resolved charges against Zan Shaikh and his company, Mining Automatic, over an alleged fraud scheme involving cryptocurrency mining. According to the regulator, more than 380 investors allegedly invested approximately US$ 22 million in an operation that promised guaranteed monthly returns, but never delivered the advertised results.
The complaint states that the scheme operated between June 2023 and May 2025. During that period, Shaikh and Mining Automatic promoted investment opportunities based on an alleged cryptocurrency mining structure, claiming that clients' funds would be used to expand the company's operational capacity.
However, the SEC's investigation indicates SEC points out that most of the money was never allocated to the promised activity. According to the statement, only a small portion of the amounts raised was actually used for expenses related to mining.
"Despite claiming that they would use investor funds to engage in crypto asset mining, Shaikh and Mining Automatic used only about 13% of investor funds for expenses related to the alleged crypto asset mining," the statement says.
In addition to the improper allocation of resources, the SEC states that those responsible made several false statements to convince investors to remain in the project. Among them were information about the team's experience, the structure of the operation, the use of the capital raised, and the performance of cryptocurrency mining.
The complaint also maintains that those involved presented misleading justifications to explain delays in the promised monthly payments, while continuing to promote the operation and attract new investors.
According to the investigation, Mining Automatic raised at least US$ 20 million more than it distributed to participants. The SEC states that much of that money was directed to marketing campaigns with the aim of attracting new investors, in addition to Zan Shaikh's personal and business expenses that had no connection whatsoever to the mining activity.
The lawsuit accuses Shaikh and Mining Automatic of violating the Securities Act of 1933 and the Securities Exchange Act of 1934. As part of a partial settlement with the SEC, both accepted the issuance of judgments permanently barring them from committing new violations of these rules, while the regulator seeks the application of the other sanctions provided for in the action.