SEC Takes Action Against Geosyn Mining for $5.6 Million Crypto Mining Scam

The US Securities and Exchanges Commission (SEC) has filed a suit towards Geosyn Mining and its co-founders for alleged fraud. The regulator claims that Geosyn and its co-founders, Caleb J. Ward and Jeremy G. McNutt, deceived investors and spent $5.6 million in investor funds for private exhaust.  

The lawsuit filed in a Texas federal court says that Geosyn Mining lied and falsely declared its operational capability to defraud unsuspecting investors. 

SEC Crackdown on Geosyn Mining: Allegations of Fraud and Misrepresentation Unveiled

The April 24 filed in US District Court docket in Citadel Worth, Texas, highlighted a series of fake actions allegedly committed by Geosyn and two of its executives.

The securities watchdog claims that Geosyn defrauded about 64 investors by promoting carrier agreements disguised as securities. The submitting notes that Geosyn, its CEO Ward, and used COO McNutt raised $5.6 million from 64 investors between November 2021 and December 2022.

The parties promised to take and saunter tools for mining cryptocurrencies indulge in Bitcoin and originate mined money to investors for a rate. Also, the company falsely claimed to dangle acceptable deals with electricity providers and may well take vitality at a cheap rate. Nonetheless, truly, the vitality designate became as soon as as much as 40 to 50% better than what Geosyn declared to prospects.

To boot to, Geosyn lied regarding the series of mining tools bought. Within the carrier agreements, it allegedly claimed to dangle bought 1,400 mining rigs. Nonetheless, the tools equipped became as soon as rapid of 400 devices. Also, most of the bought machines were never deployed online. 

Furthermore, the SEC alleged that the company didn’t present the carrier it promised, equivalent to allowing investors to make a decision their mining method and the money to mine. As a change, it thoroughly allowed investors to mine Bitcoin whereas rejecting requests to mine other cryptocurrencies.

The regulator talked about Geosyn made investors agree with its challenge became as soon as profitable when it became as soon as now not. The corporate earned thoroughly $320,000 however paid out about $354,500 to investors. McNutt equipped bitcoin and gave it to Ward to distribute to invent up for the distinction.

Geosyn’s Founders Misuse of Funds and Violations, SEC Alleges

The SEC’s complaint alleges that Geosyn’s CEO, Ward, and ex-COO McNutt misappropriated investor funds for private exhaust. The submitting acknowledged that the co-founders diverted about $1.2 million of investor funds to finance lavish lifestyles. 

The duo misappropriated approximately $1.2 million in prospects’ funds for costly meals, holidays, firearms, nightclubs, and rather a lot others. The SEC court submitting states that McNutt spent $20,000 in company funds on a Las Vegas nightclub wedding occasion for Ward. He spent $49,000 on a household commute to Disney World and $22,000 on a breathalyzer and other prices.

By the stop of 2022, investor funds in Geosyn’s custody had vastly reduced, with now not as much as $1,900 left in the company’s story.

Essentially basically based completely on the alleged offenses, the SEC prices the defendants with violations of the antifraud and securities-registration provisions of the federal securities prison pointers. 

The regulator seeks permanent injunctions towards the defendants and officer-and-director bars. The SEC additionally seeks disgorgement of misappropriated funds and civil penalties towards McNutt and Ward.

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