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The Securities and Exchange Commission (SEC) agreed to halt its fraud lawsuit against cryptocurrency mining company Geosyn Mining and its executives, according to a CoinTelegraph report.
This decision came after federal prosecutors filed similar charges against Geosyn's CEO Caleb Joseph Ward and former executives Jeremy George McNutt and Jared McNutt. The SEC's case, initially filed in April 2024, was paused following the voluntary surrender and court appearance of Ward and Jeremy McNutt on Monday.
The SEC's lawsuit accused Ward and Jeremy McNutt of defrauding approximately 64 investors out of $5.6 million between November 2021 and December 2022. The agency contended that the service agreements sold by Geosyn were unregistered securities, a claim that Ward has contested.
According to the SEC, the company failed to purchase 400 out of 1,400 mining rigs it had agreements for and did not activate most of the rigs that were bought. Furthermore, the SEC alleged that Ward reported Jeremy McNutt for embezzlement without revealing his own misappropriations.
Federal prosecutors, on the other hand, detailed in a February 5 affidavit unsealed on February 10 that the executives engaged in fraudulent activities, using customer funds to finance personal expenditures such as luxury items and trips. The affidavit also claimed that the executives provided false reports to customers and misused new client funds to pay earlier clients, while lying about the costs of mining equipment.
Last week, in response to a January inquiry from Judge Mark Pittman, Ward and Jeremy McNutt requested the court to suspend the SEC's case due to the parallel criminal case. They sought to assess how President Donald Trump's crypto-friendly policy moves might influence the SEC's authority and its stance on this case. Trump has indicated a desire to relax regulatory enforcement in the crypto sector, and the SEC has recently established a crypto task force to engage with the industry while also pausing some of its crypto-related lawsuits.
The SEC, in its own filing on the same day, argued that neither the SEC's Crypto Task Force nor the current administration's views on the crypto industry should affect the ongoing case, as it does not pertain to cryptocurrency regulation and does not allege the sale of cryptocurrencies by Ward and McNutt.
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