SEC pauses lawsuit against crypto mining firm Geosyn at executives’ request

The SEC has suspended its fraud lawsuit against Geosyn Mining at the request of the accused executives, following federal charges on similar allegations.

On Feb. 14, the SEC informed a Texas court that it would suspend the ongoing case against the crypto mining company Geosyn, as originally reported by Cointelegraph. This decision followed the surrender of Geosyn’s CEO, Caleb Ward, and former operations chief, Jeremy McNutt, to authorities after federal prosecutors accused Ward, Jeremy George McNutt, and a former executive Jared McNutt, of defrauding customers by misappropriating their funds for personal expenses instead of operating their crypto mining business.

The accused requested that the SEC pause its case in light of the federal charges and to evaluate how the Trump administration’s pro-crypto regulation might affect the SEC’s authority. However, the SEC maintained that the case had nothing to do with crypto regulation and emphasized that it did not involve allegations of selling cryptocurrencies.

The SEC’s lawsuit , which was filed in April 2024, alleged that Caleb Joseph Ward and Jeremy George McNutt ran an unregistered and fraudulent securities offering. According to the lawsuit, between Nov. 2021 and Dec. 2022, the trio raised $5.6 million from 64 investors by selling investment contracts, while making false claims about their mining operation.

Specifically, the accused misled investors by promising special electricity deals that would make mining profitable. They also failed to disclose that they had not purchased or activated mining machines for their investors. Finally, the SEC claimed they misused $1.2 million for personal expenses and used $354,500 to pay other investors by allegedly buying Bitcoin ( BTC ) to make the payouts appear legitimate.