Zan Shaikh Mining Automatic Fraud Case Full Details

The Guaranteed Return Illusion

The promise was simple and seductive: invest in Mining Automatic’s crypto asset mining operation and receive guaranteed monthly returns. No expertise required. No volatility risk. Just passive income flowing from cutting-edge technology and exclusive low-cost energy deals.

Zan Shaikh, a 28-year-old with a sizeable social media following built on teaching followers how to “drive every conceivable penny” into a business’s “marketing machine,” launched Mining Automatic in June 2023. His prior ventures included teaching people how to game Amazon storefront algorithms and run YouTube advertising businesses. None involved crypto mining.

According to the SEC complaint filed in Massachusetts federal court on July 20, 2026, Shaikh and his company Bright Vision Distribution LLC made materially false statements to over 380 investors across multiple states. The core lie was this: your money will fund crypto mining equipment that generates your returns. The reality was this: your money funds ads to recruit more investors, pays earlier investors to keep the scheme alive, and bankrolls my personal lifestyle.

That quote comes from a March 2023 video Shaikh posted to social media. He was telling followers how his “infinite money printer” marketing strategy would generate limitless revenue. Mining Automatic had precisely this issue. Shaikh intentionally, knowingly, or at least recklessly, failed to deliver on the promises he made to investors.

The Investment Agreements: A Contract Built on Sand

Investors who saw Mining Automatic advertisements on social media were contacted by company employees or sometimes Shaikh himself. They were provided with Investment Agreements, signed by Shaikh on behalf of Mining Automatic and by the investor. The agreements promised:

• Mining Automatic would install crypto asset mining equipment at its locations for each investor.
• The investor would pay a fixed upfront dollar amount to generate returns from that equipment.
• The investor would receive 80% of the profits for five years arising from their specific portion of the mining operations. Mining Automatic would receive 20%.
• Profits would be calculated and paid on a monthly basis.

Many agreements guaranteed a minimum monthly return of 3%, with potential upside to 10%+ depending on market conditions. Nearly all Investment Agreements also guaranteed that investors would be made whole at the end of the five-year term if their total returns fell short of their original investment amount.

The Investment Agreements gave all managerial control and ownership of the crypto asset mining equipment to Mining Automatic. Investors had no right, title, or interest in the equipment except as specified in the contract. They were purchasing the right to future profits from a mining operation they did not control and could not verify.

This structure is a textbook unregistered security. The SEC alleges Defendants violated 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.

The 13% Rule: Where the Money Actually Went

Between June 2023 and February 2025, Defendants paid Company A (a third-party provider of mining equipment and hosting services) approximately $2.9 million. This represents only 13% of the $22 million raised from investors.

Company A’s mining operations purportedly generated approximately $1.1 million in crypto assets, which were sent to wallets controlled by Shaikh. Investors collectively received approximately $1.8 million in purported investment returns or “complementary payments.” This means the total payments to investors exceeded the actual profits generated by mining activities. Some investor returns were financed by other investors’ capital—a hallmark of a Ponzi scheme.

The remaining 87% of investor funds was allocated as follows:

• $7 million on marketing and advertising to solicit new investors.
• $375,575 on real estate expenses for Shaikh.
• $151,750 at a car dealership.
• $76,547 on entertainment.
• $118,585 in cash withdrawals.
• $778,550 transferred directly to bank accounts owned by Shaikh.
• $500,000 on Shaikh’s unrelated business ventures.

Despite the Investment Agreements stating that Defendants were entitled to 20% of the profits from crypto mining (approximately $220,000 based on the $1.1 million in mining proceeds), Shaikh’s personal and unrelated business expenses far exceeded this amount.

The Lies They Told

Defendants made numerous materially false and misleading statements to investors, both in marketing materials and in direct communications:

“This is a very hands off opportunity. Once your account is connected you just sit back and allow funds to be mined and sent to your account. This is a long term opportunity where we handle all of the configuration, optimization and ongoing management for you.”

“Your investment ensures a guaranteed return percentage, offering a minimum of 3% monthly returns with the potential to earn up to 10%+, depending on market conditions. We commit to providing consistent returns throughout the duration of your agreement.”

The Mining Automatic website claimed the company had obtained “annual returns” of 51.5% in 2021, 46.2% in 2022, and 51.8% in 2023. Mining Automatic did not exist in 2021 or 2022. Defendants had no factual basis to make these claims.

The website also claimed the management team had “over 30 cumulative years of experience” in mining and electricity and had “worked for billion dollar companies in the mining and electricity space.” According to the SEC complaint, neither Shaikh nor many other Mining Automatic employees had any prior experience in crypto asset mining.

Marketing materials assured investors they were “investing in the underlying infrastructure rather than particular crypto assets whose prices could fluctuate,” touting the safety of their capital from market volatility. In reality, investors were financing a fraud.

Legal Receipts

“This case involves the misappropriation and misuse of investor assets by Shaikh and his company, Mining Automatic. Defendants engaged in a fraudulent scheme and made materially false and misleading statements in connection with their unregistered securities offering relating to crypto asset mining.”

— SEC Complaint, Case 1:26-cv-13301, ¶1

“Despite Defendants’ representations that they would use investors’ funds to engage in crypto asset mining, Defendants pooled investors’ contributions and used only about 13% of investors’ funds on expenses relating to purported crypto asset mining. Instead, they used investors’ funds largely for marketing to solicit new investors and to pay for Shaikh’s personal and unrelated business expenses.”

— SEC Complaint, Case 1:26-cv-13301, ¶6

“As of the date of this Complaint, Defendants have failed to repay over $20 million in investment principal to Mining Automatic investors. This sum does not account for the investment returns that Defendants promised to these investors and accounts only for investment principal.”

— SEC Complaint, Case 1:26-cv-13301, ¶10

“Shaikh distributed to other investors, in April 2025, a video in which he claimed that Mining Automatic was being ‘acquired’ by ‘one of the much bigger players in the space’ who wanted ‘to scoop it up as soon as possible’ and that investors would be made whole along with additional payments. At the time he made these statements, Shaikh knew, or was at least reckless in not knowing, that they were false and that Mining Automatic was not being acquired by another company.”

— SEC Complaint, Case 1:26-cv-13301, ¶52

Societal Impact Mapping

Economic Inequality

Approximately 100 of the 380 investors were not new to Shaikh’s ecosystem. They had previously invested in another of Shaikh’s earlier, abandoned businesses. They were convinced by Shaikh or others acting at his direction to “roll over” their investments from the prior failed venture into Mining Automatic. This subset collectively invested about $7 million of the total $22 million raised.

These individuals had already lost money in a Shaikh venture. They were then persuaded to transfer those losses into a new promise. This is not a one-time scam. This is a pattern of exploitation targeting people desperate to recover prior losses, weaponizing the sunk cost fallacy and the trust Shaikh had built through his prior relationship with them.

The 280 new investors collectively invested about $15 million. Many of these individuals likely saw Mining Automatic’s social media ads promising guaranteed returns and passive income. In an economic environment where wages are stagnant, housing costs are crushing, and traditional savings vehicles offer negligible returns, the promise of 3% monthly returns (36% annually) is extraordinarily appealing. It is also a massive red flag. Legitimate investments do not guarantee returns. Frauds do.

Public Trust Erosion

Shaikh leveraged his social media following to build credibility. He posted content about building wealth through marketing. He cultivated an image as someone who understood how to generate “limitless revenue.” His followers trusted him. That trust was the entry point for the fraud.

The Mining Automatic website claimed “8+ Years [of] crypto experience” and a management team with “over 30 cumulative years of experience.” None of this was true. The website’s claimed historical returns for 2021 and 2022 were fabricated. Mining Automatic did not exist in those years.

When trust is weaponized at scale through social media platforms, the damage extends beyond the immediate victims. It poisons the well for legitimate projects, increases regulatory skepticism, and deepens the cynicism of an already disillusioned generation.

Systemic Regulatory Failure

Defendants did not file a registration statement with the SEC for the offer and sale of the Investment Agreements. This is a violation of Sections 5(a) and 5(c) of the Securities Act of 1933. The Investment Agreements are securities. They meet every element of the Howey Test: an investment of money, in a common enterprise, with an expectation of profits, derived solely from the efforts of others.

The fact that this scheme operated for nearly two years (June 2023 to May 2025) and raised $22 million before the SEC filed charges raises uncomfortable questions about the pace of enforcement in an industry that moves at internet speed. Investor 1, the Army servicemember, invested in October 2024. By that time, the scheme had been operating for over a year and had raised millions. Had regulatory action been taken earlier, he and dozens of others might not have lost money.

This is not a defense of the defendants. It is a recognition that the current regulatory infrastructure is not designed to move fast enough to protect people from rapidly scaling digital frauds.

The “Cost of a Life” Metric

What Now?

The SEC’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and orders prohibiting Shaikh from acting as an officer or director of public companies and from participating in the issuance, purchase, offer, or sale of securities (with an exception for his own personal accounts).

As of the publication of this article, the case is in its early stages. The defendants have not yet filed a response. The outcome is uncertain.

Watchlist

• Securities and Exchange Commission (SEC): Case No. 1:26-cv-13301, United States District Court for the District of Massachusetts
• Federal Trade Commission (FTC): Consumer protection authority for deceptive business practices
• Consumer Financial Protection Bureau (CFPB): Financial fraud reporting
• Massachusetts Securities Division: State-level securities enforcement

For Affected Investors

If you invested in Mining Automatic, you may be entitled to restitution through the SEC enforcement process. Monitor the case docket for updates on potential victim compensation funds. Contact the SEC’s Boston Regional Office at the address listed in the complaint if you have not yet been contacted by investigators.

Document everything. Save all Investment Agreements, email correspondence, text messages, payment receipts, and marketing materials you received from Mining Automatic or Zan Shaikh. These records are evidence.

Mutual Aid and Organizing

Investor fraud thrives in isolation. If you were defrauded, you are not alone. Consider connecting with other affected investors to share information and coordinate advocacy. Class action litigation may be an option if the SEC’s enforcement action does not result in full restitution.

Demand stronger investor protections for crypto-related securities offerings. Contact your congressional representatives and demand that the SEC be given the resources and authority to regulate crypto securities offerings in real time, not two years after the fraud has already collapsed.

Support financial literacy programs in your community. The best defense against investment fraud is skepticism, due diligence, and a basic understanding of red flags. If an investment promises guaranteed returns, it is either a lie or a crime in progress.

Source Document

Case Name: Securities and Exchange Commission v. Zan Shaikh and Bright Vision Distribution LLC, d/b/a Mining Automatic
Case Number: 1:26-cv-13301
Court: United States District Court for the District of Massachusetts
Filed: July 20, 2026
Document Type: Complaint
Pages: 19
Public Access: Available via PACER (Public Access to Court Electronic Records) at https://www.pacer.gov