SEC Charges Crypto Mining Firm Geosyn for Misappropriating $5.6 Million
As a crypto enthusiast, you may be interested to know that the US Securities and Exchange Commission (SEC) recently filed legal action against the prominent crypto mining firm Geosyn and its co-founders. The commission alleges that the defendants misappropriated a substantial sum of $5.6 million from investors through fraudulent activities. Here’s what you need to know about the case:
What Led to SEC’s Charges Against Geosyn?
- The SEC’s charges stem from the company’s alleged deception of around 64 investors between 2021 and 2022.
- Key figures implicated in the lawsuit include CEO Caleb Joseph Ward and former operations chief Jeremy George McNutt.
- Geosyn promised investors that they would purchase, maintain, and operate crypto mining machines, distributing the mined assets such as Bitcoin to investors for a fee.
The Allegations Against Geosyn
The SEC’s investigation unveiled several alarming practices by Geosyn and its executives, shedding light on the following:
- The company failed to deliver on its promise of obtaining mining rigs for investors, with 400 out of 1,400 machines remaining unacquired.
- Geosyn limited its mining operations to Bitcoin, contrary to the promised diversified cryptocurrencies for investors.
- False contracts with electricity suppliers were fabricated to misrepresent lower energy costs, manipulating investor perceptions of profitability.
- Executives diverted approximately $1.2 million for personal use, including extravagant expenses like funding a lavish wedding in Las Vegas.
Implications and Demands by SEC
The consequences of these fraudulent activities have severe implications for both Geosyn and its executives:
- Geosyn faced potential bankruptcy as investor funding dwindled towards the end of 2022.
- Ward accused McNutt of embezzlement, but failed to disclose his own financial wrongdoings.
- The SEC demands permanent injunctions against the defendants, full repayment of misappropriated funds, and appropriate penalties.
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