SEC Files Lawsuit Against Bitcoin Miner Geosyn, Alleging Founders' $5.6M Fraud

Cointelegraph reported that the SEC filed a lawsuit against Geosyn Mining, its CEO Caleb Ward, and former COO Jeremy McNutt accusing them of a $5.6 million fraud. The SEC alleges Geosyn lied about the number of mining rigs it had, used customer money for personal expenses, and misled investors about mining profitability.

According to the SEC, Geosyn sold service agreements as securities between November 2021 and December 2022, promising to buy and run crypto miners for investors. The SEC claims these agreements falsely advertised cheap energy contracts and Geosyn never purchased hundreds of the promised mining rigs.

Geosyn allegedly made fake documents to show profits and used some investor money to pay others, creating a Ponzi-like scheme. The SEC alleges Ward and McNutt used over $1 million in investor funds for personal expenses like vacations and legal fees.

By the end of 2022, Geosyn was out of money and unable to make a profit. Ward reportedly contacted authorities about McNutt embezzling funds but didn't disclose his own wrongdoings. Geosyn never filed for bankruptcy as promised to investors.

The SEC is seeking a permanent injunction against Geosyn, repayment of misappropriated funds, and penalties for all three individuals.

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