SEC Files Fraud Charges Against Geosyn and Co-Founders for Alleged $5.6 Million Crypto Mining Scheme

The U.S. Securities and Exchange Commission has taken legal action against Texas-based crypto mining and hosting company Geosyn and its co-founders Caleb Ward and Jeremy McNutt for allegedly orchestrating a $5.6 million fraud scheme. According to the SEC complaint filed on Wednesday, the defendants deceived over 60 investors by making false claims about Geosyn’s operations and financial status.

The agency accused Geosyn of failing to disclose crucial information to new investors, including the fact that previous investors had not received the promised mining machines. Additionally, the company allegedly did not fulfill the services outlined in its offering documents. The defendants were also accused of fabricating contracts with electricity providers and misusing funds for personal expenses like family vacations, guns, and watches.

To cover up operational deficiencies, Geosyn, McNutt, and Ward reportedly made “periodic bitcoin distributions” to investors, despite only raising a fraction of the distributed amount from mining activities. As the company’s financial situation deteriorated in late 2022, McNutt resigned and relinquished his ownership stake following accusations of embezzlement by Ward.

The SEC is seeking a permanent injunction against the defendants, as well as the repayment of misappropriated funds and the imposition of penalties. The agency alleged that each defendant acted knowingly and recklessly in perpetuating the fraud. Geosyn has yet to respond to requests for comment on the matter.

It is important to note that The Block, the source of this information, is an independent media outlet with financial ties to Foresight Ventures, a major investor in the crypto industry. The Block remains committed to delivering unbiased news and analysis on the crypto sector.