The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Geosyn Mining, a Texas-based Bitcoin mining company, and its founders for engaging in an unregistered and fraudulent securities offering. The defendants allegedly raised over $5.6 million from 64 investors through deceptive practices.

During the period between November 2021 and December 2022, Geosyn Mining falsely claimed to have favorable contracts with electricity providers that enabled them to operate crypto asset mining machines profitably. However, they failed to disclose important information to new investors, such as not purchasing or activating mining machines for some previous investors.

Furthermore, the SEC alleges that Geosyn failed to provide the services promised in its offering documents, including personalized crypto mining strategies and round-the-clock monitoring of mining machines. The founders of Geosyn, Ward and McNutt, misappropriated approximately $1.2 million for personal use and made payments totaling about $354,500 to investors, supposedly as distributions from mining activities.

The SEC has accused Geosyn and its founders of violating federal securities laws related to fraud and registration. The regulator is seeking permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and any other necessary equitable relief as determined by the court.

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