TechFlow reports that U.S. securities regulators have filed a lawsuit against Geosyn Mining and its founder, accusing them of inflating the number of cryptocurrency mining devices and using client funds for personal expenses, involving a total of $5.6 million.
The SEC stated that Geosyn claimed to have secured discounted power supply contracts, but the actual costs were 40–50% higher than advertised. In addition, the company did not purchase approximately 400 mining machines and failed to activate the majority of those it had acquired.
The SEC also alleged that Geosyn refused to mine any cryptocurrencies other than Bitcoin and used falsified documents to show profitability to investors. Furthermore, the founder used investor funds for personal expenditures, including nightclub celebrations and vacation trips.
The SEC is seeking penalties against Geosyn and other defendants, as well as the recovery of misappropriated funds. The defendants have not yet commented.
