SEC Targets Mining Automatic for Alleged $22 Million Crypto Fraud Scheme

The Securities and Exchange Commission (SEC) has filed a lawsuit against Mining Automatic, a Massachusetts-based operation that promised investors guaranteed returns from cryptocurrency mining. The SEC alleges that between 2023 and 2025, Mining Automatic raised $22 million from hundreds of investors through a scheme that delivered far less than advertised.

According to the SEC, Mining Automatic's website claimed to offer recurring passive income through its expertise in crypto asset mining, with annual returns of 51.5% in 2021, 46.2% in 2022, and 51.8% in 2023. However, the regulator claims that only about 13% of investor funds went toward actual mining operations, generating roughly $1.1 million while paying out $1.8 million to investors.

The SEC alleges that Mining Automatic spent significant sums on marketing and advertising efforts to attract new investors, with approximately $7 million of the $22 million invested in this area. Shaikh also used investor funds for personal expenses, including real estate charges, entertainment, a car dealership, and cash withdrawals, totaling over $1.8 million.