Crypto Mining Firm's CEO Surrenders: SEC Halts Fraud Lawsuit

The Securities and Exchange Commission (SEC) has temporarily halted its fraud lawsuit against crypto mining firm Geosyn Mining and its executives following the filing of similar charges by US federal prosecutors against the company's CEO and two former executives.

In a February 14 filing to a Texas federal court, the SEC agreed to stay the case it filed in April 2024, after Geosyn CEO Caleb Joseph Ward and the firm's former operating chief Jeremy George McNutt surrendered to authorities and appeared in court on February 13.

An FBI affidavit, filed on February 5 and unsealed on February 10, alleged that Ward, McNutt, and Jared McNutt, Geosyn's former sales manager, defrauded their customers and used their money for personal expenses. The trio promised to buy and host Bitcoin (BTC) mining rigs for customers in exchange for a monthly fee and a share of the mined BTC. However, prosecutors claimed that in many cases, they did not purchase the equipment and instead spent customer money on luxury items, such as guns, watches, and vacations.

The executives also sent fake reports to customers to make them believe their mining rigs were generating income. Additionally, they used money from new clients to buy Bitcoin and transfer it to earlier clients without disclosing that their miners were not operational. The trio also lied to potential clients about the cost of mining rigs to make an additional profit.

The SEC's lawsuit claimed that Ward and Jeremy McNutt defrauded around 64 investors out of $5.6 million between November 2021 and December 2022. The agency alleged that the service agreements were sold as unregistered securities, a claim that Ward has disputed. The SEC also claimed that Geosyn failed to purchase 400 of the 1,400 mining rigs it entered into agreements over and did not bring most of the purchased rigs online.

Last week, Ward and Jeremy McNutt responded to a January request from Judge Mark Pittman, asking them and the SEC how Donald Trump's administration and new leadership at the SEC could affect the case. The pair asked the court to hold the SEC's case due to the twin case launched by prosecutors and to allow them to assess how Trump's crypto-friendly policy moves would impact the SEC's authority, enforcement priorities, and position on the