SEC Launches $22 Million Crypto Enforcement Action: How Millions Were Vaporized with “Guaranteed Profit” Promises

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against a Florida-based individual and his company for a $22 million cryptocurrency mining fraud.

As security and regulatory measures continue unabated in the cryptocurrency world, the SEC has uncovered a new fraudulent operation. The agency accuses Zan Shaikh and his company, Mining Automatic, of orchestrating a multi-million dollar scheme by deceiving investors with false promises. This move, reflecting the regulator’s jurisdiction and seriousness, stands out as part of the ongoing struggle against bad actors in the industry.

According to investigations, approximately $22 million was collected from over 380 investors in activities conducted between June 2023 and May 2025. Shaikh and his team promised investors guaranteed monthly returns from cryptocurrency mining operations. However, it soon became clear that the reality was far different from the presentation, and the operation lacked the capacity to generate the promised returns.

Personal Spending Instead of Mining

The complaint filed by the SEC states that only a small portion—just 13 percent—of the collected funds was used for mining-related expenses. The bulk of the massive remaining sum was diverted toward marketing activities aimed at attracting new victims and toward Shaikh’s personal luxury spending. When the company was unable to make payments to investors, it attempted to stall by providing misleading information about their expertise and the status of the operation.

Documents submitted to federal court emphasized that the defendants clearly violated securities laws. Zan Shaikh and Mining Automatic reached a partial settlement with the SEC, agreeing to permanent injunctions and court orders to prevent future violations. This incident once again proves how cautious investors must be regarding projects in the cryptocurrency market that promise high and guaranteed returns, particularly through mining.