SEC Sues Mining Automatic Founder Over Alleged $22M Crypto Mining Scam

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Mining Automatic and its founder, Zan Shaikh, alleging they ran a $22 million crypto mining scheme that defrauded over 380 investors.

According to the SEC complaint, Mining Automatic raised money from investors between June 2023 and May 2025 with promises of guaranteed monthly returns from crypto asset mining. However, the company allegedly spent only about 13% of the funds on actual mining operations, while using the rest for marketing, personal expenses, and unrelated ventures.

The operation generated around $1.1 million in revenue from mining, but paid investors roughly $1.8 million in purported returns. The SEC claims this shortfall led to some payments being funded by money from other investors, effectively creating a Ponzi scheme.

Shaikh allegedly used investor funds for personal expenses, including real estate purchases, vehicles, entertainment, and transfers to his bank accounts. More than $20 million in principal remains unpaid, according to the complaint.