SEC Files Partially Settled Charges in $22M Crypto Mining Scheme
The U.S. Securities and Exchange Commission filed partially settled charges July 20 against Zan Shaikh and his company, Bright Vision Distribution LLC, doing business as Mining Automatic, alleging the Massachusetts-based firm raised approximately $22 million from more than 380 investors through an unregistered securities offering tied to a purported crypto asset mining operation.
Crypto asset “miners” provide computational resources to validate transactions on a crypto network, a process known as “mining,” and may be rewarded with crypto assets in return.
According to the SEC’s complaint, filed in the U.S. District Court for the District of Massachusetts, Shaikh and Mining Automatic sold investors “Mining Automatic Agreements” between June 2023 and May 2025 that promised a share of profits from crypto mining equipment the company said it would install and operate on investors’ behalf. Many of the agreements guaranteed a minimum monthly return, typically 3%, and pledged to make investors whole at the end of a five-year term if total returns fell short of the original investment, according to the complaint.
The SEC alleges Shaikh and Mining Automatic spent only about 13% of investor funds on expenses related to the purported mining operations, instead directing money toward marketing to solicit new investors and toward Shaikh’s personal and unrelated business expenses. The complaint states the defendants have taken in at least $20 million more than they have repaid to investors.
The complaint details one investor’s experience as illustrative of the alleged scheme: an Army servicemember invested $25,000 in October 2024 under an agreement promising a minimum 3% monthly return. He received a single payment in February 2025 – worth approximately $63, a fraction of what was promised – which Mining Automatic told him was a “complementary payout” tied to an equipment transition. According to the complaint, he was later told in spring 2025 that the company was being liquidated and that he would be repaid in full plus additional money; he never received those payments.
Around the same time, the complaint alleges, Shaikh told other investors in a video that Mining Automatic was being “acquired” by a larger company and that they would be made whole, a claim the SEC alleges was false.
Shaikh and Mining Automatic are charged with violating the registration and antifraud provisions of the federal securities laws – Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The defendants have consented to the entry of judgments, subject to court approval, that would permanently enjoin them from further violations, impose an officer-and-director bar and a conduct-based injunction against Shaikh, and require them to pay disgorgement, prejudgment interest, and civil penalties in amounts to be determined by the court.
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