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“The U.S. Securities and Exchange Commission (SEC) has initiated legal action against Geosyn Mining, a Bitcoin mining company based in Texas, and its founders Caleb Joseph Ward and Jeremy George McNutt. The lawsuit accuses them of conducting a fraudulent and unregistered securities offering that amassed over $5.6 million from approximately 64 investors from November 2021 to December 2022.
According to the SEC, the funds were raised through the sale of investment contracts, wherein Geosyn allegedly misrepresented their operational efficiencies by claiming to have favorable contracts with electricity providers, which purportedly allowed them to profitably run cryptocurrency mining operations.
The commission further alleges that the defendants did not disclose vital information to investors, including the omission of their failure to purchase or activate mining equipment for some of their earlier investors. Moreover, the SEC contends that Geosyn misrepresented the nature of their services in their offering documents, falsely claiming to offer customized crypto mining strategies and continuous monitoring of mining operations.
The legal complaint also details that Ward and McNutt misused around $1.2 million for personal expenses and distributed approximately $354,500 to investors, supposedly from the profits of their mining activities. However, internal communications suggest that the defendants considered purchasing Bitcoin to cover these payments.
The SEC’s lawsuit seeks to enforce federal securities laws by addressing the violations related to anti-fraud and registration provisions. The regulator is requesting the court for permanent injunctions, disgorgement of illegally obtained gains with interest, civil penalties, and other equitable reliefs as deemed necessary.”
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