The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Geosyn Mining, LLC, a Texas-based crypto mining and hosting company, and its co-founders, Caleb Ward and Jeremy McNutt, continued to allegations of participation in fraudulent and unregistered activities. .
Geosyn’s Alleged Fraud Scheme
According to the SEC, Geosyn, Ward, the company’s CEO, and McNutt, the company’s then-COO, raised approximately $5.6 million from more than 60 investors between November 2021 and December 2022.
According to complaintGeosyn told investors it would purchase, mine and distribute crypto assets mined by mining machines, such as Bitcoin (BTC), for an undisclosed amount.
However, the SEC alleges that the defendants made false statements, failed to disclose material information to investors, and failed to provide the services promised in their offering documents.
The complaint also states that Geosyn falsely claimed to have favorable contracts with electricity suppliers that were supposed to ensure the profitable operation of mining machines..
Furthermore, the cryptocurrency mining company allegedly did not disclose to new investors that it had not purchased mining machines for some previous investors, and it did not disclose that Geosyn was not fulfilling its stated services, including personalized mining strategies and 24/7 on-site monitoring.
The SEC also alleges that Ward and McNutt embezzled approximately $1.2 million for their personal use and distributed approximately $354,500 to investors as purported profit distributions despite Geosyn’s “lack of profitability.”
The SEC filed suit in the U.S. District Court for the Northern District of Texas, loading defendants for violations of the antifraud and securities registration provisions of the federal securities laws.
Ultimately, the SEC seeks permanent injunctions against all defendants, enjoinments for officers and directors, disgorgement with prejudgment interest, and civil penalties, particularly against Ward and McNutt.
Crypto users warned by the FBI
The United States Federal Bureau of Investigation (FBI) has issued a warning to American citizens regarding the use of unregistered cryptocurrency money transfer services.
In a statement released Thursday by the FBI’s Internet Crime Complaint Center (IC3), individuals were warned against using services that do not comply with federal law and do not comply with anti-money laundering regulations ( AML).
The FBI has emphasized the importance of using cryptocurrency money transfer services registered as money services businesses (MSBs) and following necessary protocols to combat suspected illicit financial activities conducted by these businesses. businesses.
According to the Bureau’s statement, people who use unlicensed crypto money transfer services may experience “disruptions” to their finances during the legal period. coercive measures, especially if their cryptocurrency holdings are mixed with funds acquired through illegal means. The statement ended with the following warning:
Cryptocurrency money transmission services that deliberately break the law or knowingly facilitate illegal transactions will be investigated by law enforcement. Using a service that does not comply with its legal obligations may put you at risk of losing access to funds after law enforcement targets these companies.
Featured image from Shutterstock, chart from TradingView.com
