SEC Files Lawsuit Against Geosyn Mining for Deceiving Investors and Misusing Funds
The US Securities and Exchange Commission (SEC) has taken legal action against Geosyn Mining and its co-founders for allegedly defrauding investors of approximately $5.6 million. The lawsuit, filed in Fort Worth, Texas, accuses the company and its leaders of deceiving investors by misrepresenting their crypto mining operations and misusing customer funds.
According to the SEC, Geosyn, CEO Caleb Joseph Ward, and former COO Jeremy George McNutt misled around 64 investors by selling them service agreements that were actually securities between November 2021 and December 2022. The agreements claimed that Geosyn had access to low-cost energy contracts for operating crypto miners, but in reality, the costs were much higher than disclosed.
Furthermore, the SEC alleges that Geosyn failed to purchase a significant portion of the agreed-upon mining platforms and that much of the equipment they did acquire never became operational. Despite promising investors the ability to mine various cryptocurrencies, the company restricted them to only mining Bitcoin.
The SEC also uncovered that Geosyn fabricated documents to make it appear that the mining equipment was profitable when it was not. Ward and McNutt allegedly embezzled approximately $1.2 million of investor funds for personal expenses, including lavish purchases like meals, nightclubs, vacations, weapons, and watches.
As the company’s funds dwindled by the end of 2022, with less than $1,900 left in its bank account, the SEC asserts that Geosyn was unable to generate profits without the favorable electricity contracts promised to investors. The SEC is now seeking a permanent ban on trading activities for those involved, reimbursement of embezzled funds, and additional sanctions.
This case serves as a stark reminder of the risks associated with investing in the cryptocurrency industry and the importance of conducting thorough due diligence before committing funds.
