SEC Takes Legal Action Against Geosyn Mining, LLC and Co-Founders for Alleged Fraudulent Activities- Advertisement -
FBI Warns Crypto Users About Unregistered Money-Transmitting Services
The US Securities and Exchange Commission (SEC) has taken legal action against Geosyn Mining, LLC, a Texas-based crypto mining and hosting company, and its co-founders, Caleb Ward and Jeremy McNutt, over allegations of engaging in unregistered and fraudulent activities.
Geosyn, Ward, and McNutt are accused of raising approximately $5.6 million from more than 60 investors between November 2021 and December 2022. The SEC alleges that the company made false claims, failed to disclose material information to investors, and did not provide the services promised in their offering documents.
The complaint against Geosyn also includes claims that the company falsely represented having favorable contracts with electricity providers to ensure profitable operation of mining machines. Additionally, they allegedly failed to disclose to new investors that they had not purchased mining machines for some previous investors and were not fulfilling promised services.
Ward and McNutt are accused of misappropriating approximately $1.2 million for personal use and distributing around $354,500 to investors as profit distributions despite Geosyn’s lack of profitability. The SEC has filed the complaint in the US District Court for the Northern District of Texas, seeking permanent injunctions, disgorgement, and civil penalties against the defendants.
In a related development, the FBI has issued a warning to American citizens about using unregistered cryptocurrency money-transmitting services. The Bureau emphasized the importance of using registered Money Services Businesses (MSBs) to comply with federal law and anti-money laundering regulations.
Individuals using unlicensed crypto money transfer services may face disruptions to their finances during law enforcement actions, especially if their funds are commingled with illegally acquired funds. The FBI warned that services breaking the law or facilitating illegal transactions will be investigated, putting users at risk of losing access to their funds.
The total crypto market cap is currently valued at $2.28 trillion, according to data from TradingView.com. As regulatory scrutiny on the crypto industry intensifies, investors and users are advised to exercise caution and ensure compliance with legal requirements to avoid potential risks.
