The American stock exchange watchdog is suing bitcoin mining company Geosyn. The Securities and Exchange Commission (SEC) says the company engaged in the issuance of unregistered securities. Through these “deceptive practices,” the company raked in more than $5.6 million.
The SEC has now filed a lawsuit against founders Caleb Joseph Ward and Jeremy George McNutt, as well as against the Geosyn Mining company itself. The company is registered in Texas, but did not do so with its fraudulent securities offering.
According to the lawsuit, between November 2021 and December 2022, the defendants raised more than $5.6 million from approximately 64 investors “through the sale of investment contracts.”
“[…] while soliciting investors, defendants falsely claimed that Geosyn had favorable contracts with electricity suppliers that allowed Geosyn to profitably operate the crypto miners […].”
Additionally, the SEC alleges that the defendants allegedly failed to share crucial information with new investors. One of the sticking points was that the team had never done anything with bitcoin miners before: they had never invested in them or connected them.
In addition, the financial regulator states that Geosyn “did not disclose” that it did not provide the services stated in the filing, such as offering personalized strategies for crypto miners or 24-hour monitoring reports.
The lawsuit alleges that Ward and McNutt embezzled approximately $1.2 million by pocketing the money. Approximately $354,500 had been distributed to investors.
The SEC has charged Geosyn and its founders with violating federal securities laws related to anti-fraud and registration requirements.
Source: https://bitcoinmagazine.nl/nieuws/sec-klaagt-bitcoin-mining-bedrijf-geosyn-aan-wegens-fraude-van-56-miljoen
