SEC Says Third-Party Bitcoin Mining Services Are Securities Offerings in New Lawsuit
The SEC has accused Danh C Vo, founder of Bitcoin mining firm VBit, of offering unregistered securities through VBit’s third-party Bitcoin mining service. Customers bought mining rigs and paid for hosting, receiving Bitcoin payouts proportional to their purchased computing power, while VBit maintained control over the operations. The SEC argues this arrangement constituted a securities offering because profits depended on VBit’s efforts. Additionally, Vo allegedly misled customers by not operating enough mining rigs to meet hosting agreements, resulting in substantial losses for many investors. The SEC also claims Vo misappropriated $48.5 million in customer funds for personal uses. Despite the Trump administration’s generally permissive stance towards crypto, it chose to pursue litigation in this case instead of dismissing the investigation. Meanwhile, lawmakers have introduced a bipartisan bill to create a federal task force to address crypto-related scams, reflecting growing concerns over potential fraud in the sector.
