SEC Alleges Crypto Mining Firm Raised Millions on False Claims
U.S. regulators have accused the founder of a bitcoin mining venture of orchestrating a large-scale investor deception, alleging that tens of millions of dollars raised for mining operations were instead diverted for personal use.
The Securities and Exchange Commission filed charges against Danh C. Vo, the founder and chief executive of VBit Technologies, claiming he misled thousands of investors about the company’s mining capacity while secretly misappropriating nearly half of the funds raised.
Key Takeaways
- The SEC alleges VBit’s founder diverted roughly $48.5 million of investor funds for personal use
- More than $95 million was raised from around 6,400 investors through bitcoin mining-related offerings
- Regulators say promised mining capacity did not exist at the scale marketed to investors
Passive Mining Promises That Didn’t Match Reality
According to regulators, VBit marketed itself as an easy entry point into bitcoin mining, offering what it described as a hands-off way for everyday investors to earn passive income. Customers could either purchase mining equipment outright or, more commonly, enter into hosting agreements that promised profits generated by mining rigs operated on their behalf.
The SEC claims that these hosting arrangements were the core of the scheme. While VBit sold agreements tied to large numbers of mining machines, investigators say the company was operating far fewer rigs than advertised. As a result, the profits investors expected were not supported by actual mining activity.
Regulators allege that Vo was either aware of this mismatch or acted with reckless disregard for the truth while continuing to sell new agreements.
Control, Misuse of Funds, and Collapse
The complaint states that Vo exercised full control over VBit’s operations, marketing materials, and investor dashboards, giving him authority over how performance and mining activity were presented to customers. This level of control, the SEC argues, reinforces its position that the hosting agreements qualify as securities because investors relied entirely on VBit’s efforts to generate returns.
Investigators also allege that Vo transferred approximately $5 million to family members and an ex-spouse, all of whom have been named in the case. In late 2021, Vo reportedly left the United States with remaining misappropriated funds following a divorce filing.
The SEC has charged Vo with securities fraud and with offering unregistered securities. VBit was later acquired by another mining group in 2022, but regulators say the business is no longer operational.
The case underscores continued regulatory scrutiny of crypto mining investments, particularly those marketed as low-effort, passive income opportunities.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
