The U.S. Securities and Exchange Commission (SEC) has filed charges against the founder of mining company VBit. The complaint alleges that the company raised over $95.6 million from approximately 6400 investors, many of whom were promised passive income from Bitcoin mining.
Details of SEC Charges Against VBit
Fraud Amount and Number of Affected Investors
The SEC complaint states that VBit collected more than $95.6 million from about 6400 individuals who invested in mining through the company. According to the regulator, these funds were raised under promises of income from operating mining equipment or through profit-sharing under hosting agreements.
Methods of Attracting Investors and Promises of Passive Income
The founder and CEO of VBit, Vo, offered investors two participation options: to personally use VBit mining devices or to enter hosting agreements to receive passive income without managing the equipment themselves. Most clients, the SEC notes, chose the latter option, expecting profits from third-party operations.
Discrepancy Between Hosting Agreements and Actual Equipment
The complaint highlights that the number of hosting agreements significantly exceeded the actual mining rigs managed by VBit. The regulator concluded that the company did not have sufficient equipment to fulfill its obligations and classified such agreements as securities due to misleading investors.
Actions of VBit CEO
Embezzlement and Use of Funds
The SEC alleges that VBit's CEO embezzled $48.5 million of the raised funds. Part of this money was reportedly spent on gambling, and significant transfers were made for the CEO's personal expenses.
Transfers to Relatives and Departure from the Country
According to the complaint, about $5 million was sent to family members and the ex-wife, who are named as defendants in the case. The complaint also states that Vo filed for divorce and subsequently left the U.S. with the embezzled funds, as reflected in the case materials.
SEC Response and Previous Measures
In addition to the lawsuit, the SEC reminded the public of recent rules on crypto asset custody for broker-dealers and previously published guidance on safeguarding digital assets. These regulatory steps aim to clarify custody requirements and responsibilities for market participants.
Why This Matters
For miners with one or several hundred rigs, this case shows that even companies offering hosting services may lack the declared capacity or transparency in fund usage. Risks include not only loss of promised payouts but also that hosting contracts may be unsecured by actual equipment.
If you use hosting services or consider such offers, it is important to understand that regulatory claims and legal proceedings can affect access to funds and payments. For more details and case materials, see case details. Instances of account blocks also help illustrate operational risks when working with platforms like pools and hosting providers.
What to Do?
Verify contracts and proof of equipment: request detailed counts of rigs and confirmation of their operation if you plan to use hosting. Contracts and payout formulas should be clear and documented, and withdrawal conditions transparent and verifiable.
Diversify risks: do not keep all funds or enter exclusive agreements with a single provider, especially if managing portfolios of dozens or hundreds of rigs. In disputes, keep records of correspondence and payments, and consult a lawyer before transferring significant sums.
If you are concerned about account blocks or operational hosting risks, it is helpful to study practical guides on securing access and interacting with platforms, such as recommendations for popular services—see the article on ViaBTC account.
