The SEC is suing Danh Vo, the founder and CEO of Bitcoin mining company VBit, alleging he misappropriated approximately $48.5 million in a fraudulent investment scheme.
According to the lawsuit, Vo is alleged to have raised more than $95.6 million from approximately 6,400 investors through an unregistered Bitcoin mining custody agreement, falsely advertised the scale and profitability of the scheme, and used some of the money for gambling and to send to relatives.
- The SEC alleges that Danh Vo misappropriated approximately $48.5 million.
- It raised over $95.6 million from approximately 6,400 investors through unregistered agreements.
- VBit has ceased operations; the SEC alleges securities violations and securities fraud.
What is the SEC lawsuit targeting?
The SEC alleges that Danh Vo and VBit offered unregistered securities and committed securities fraud related to a Bitcoin mining custody agreement.
The lawsuit alleges that Vo raised Capital through an unregistered Bitcoin mining custody agreement, totaling over $95.6 million from approximately 6,400 investors. The SEC alleges that the marketing materials exaggerated the scale of the mining operation and the promised returns.
The central accusation is the misuse of funds: the SEC says approximately $48.5 million was misappropriated in the fraudulent investment scheme. A portion of the money is alleged to have been used for gambling and transferred to family members.
Key developments and impacts
According to the SEC, VBit ceased operations following allegations related to unregistered public offerings and fraudulent conduct.
The case was described as a large-scale Capital operation in the cryptocurrency sector: over $95.6 million from thousands of investors, while the investment product was allegedly not registered according to regulations. The SEC considered this a violation of disclosure and compliance obligations.
If the allegations are proven, the lawsuit will revolve around two groups of conduct: (1) offering unregistered securities and (2) securities fraud, including false advertising about the size and profitability of mining operations and using investors' money for personal purposes such as gambling and transferring it to relatives.
