The Securities and Exchange Commission (SEC) has paused its lawsuit against crypto mining firm Geosyn Mining and its executives. This comes after U.S. federal prosecutors brought similar fraud charges against the company’s current and former leadership. On February 14, the SEC agreed to stay its case following the surrender of Geosyn CEO Caleb Joseph Ward and the firm’s former operating chief Jeremy George McNutt to authorities.
They appeared in court a day earlier. The charges, detailed in an FBI affidavit unsealed on February 10, allege that Ward, McNutt, and Jared McNutt—Geosyn’s former sales manager—defrauded customers and misused their funds for personal expenditures. These included guns, luxury watches, a family vacation to Disney World, and an expensive trip to Miami.
The FBI affidavit claims that the trio convinced customers that Geosyn would buy and host Bitcoin mining rigs on their behalf for a monthly fee, promising them a share of the mined Bitcoin. However, prosecutors allege that the executives often did not purchase the promised equipment and instead used client money for personal luxuries.
Sec pauses case amid fraud charges
The affidavit also suggests that Ward, Jeremy McNutt, and Jared McNutt misled clients by sending fake reports, making it seem as if their mining rigs were profitable. The trio is also accused of using new client money to buy Bitcoin to pay earlier clients, without disclosing that the miners were not operating, and grossly inflating the cost of the mining rigs to pocket additional profits. In its own lawsuit, the SEC alleged that Ward and Jeremy McNutt defrauded approximately 64 investors out of $5.6 million from November 2021 to December 2022.
According to the SEC, Geosyn failed to procure 400 out of the 1,400 mining rigs it had agreed to and did not operationalize most of the rigs they did purchase. Additionally, Ward allegedly reported McNutt to authorities for embezzlement without disclosing his own involvement in misappropriations. Ward and Jeremy McNutt have requested the federal court to pause the SEC’s case, arguing that the criminal charges should take precedence.
They also sought to evaluate how new leadership at the SEC could influence the case, especially given former President Trump’s promises to ease regulatory enforcement in the crypto industry. The SEC maintained that its action is not dependent on the broader policy landscape, clarifying that the lawsuit is specifically about alleged fraudulent activities, not the sale of cryptocurrencies. The litigation surrounding Geosyn Mining continues as both federal prosecutors and the SEC pursue their cases against the firm’s executives.
