The U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against Geosyn Mining, a Bitcoin mining company based in Texas, and its founders Caleb Joseph Ward and Jeremy George McNutt. The SEC alleges that the defendants conducted an unregistered securities offering, purportedly raising over $5.6 million through deceptive practices.
According to the SEC’s lawsuit, filed in response to actions taken by Geosyn between November 2021 and December 2022, the company and its founders solicited investments from approximately 64 individuals by selling investment contracts. However, the SEC claims that these solicitations were accompanied by false assertions, including claims that Geosyn possessed favorable contracts with electricity providers, enabling profitable operation of crypto asset mining machines.
Furthermore, the SEC alleges that critical information was withheld from new investors, such as the failure to disclose that Geosyn had never purchased or activated mining machines for some previous investors. Additionally, the SEC contends that Geosyn did not provide the services promised in its offering documents, such as personalized crypto mining strategies or round-the-clock monitoring of mining machines.
The lawsuit asserts that Ward and McNutt misappropriated around $1.2 million for personal use and distributed approximately $354,500 to investors, purportedly as returns from mining activities. However, internal communications among the defendants reportedly suggest the need to acquire Bitcoin to fully fund these distributions, according to the SEC.
The SEC’s legal action accuses Geosyn and its founders of violating federal securities laws pertaining to antifraud and registration provisions. The regulator is seeking various forms of relief, including permanent injunctive measures, disgorgement of illicit gains with prejudgment interest, civil penalties, and any other equitable relief deemed necessary by the court.
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