SEC Accuses VBit Founder of Massive Bitcoin Mining Fraud

United States regulators have taken decisive action against a former Bitcoin mining executive accused of misleading thousands of investors. Authorities say he also misused millions of dollars raised from the public.

The VBit case shows broader worries that have pushed authorities like the U.S. SEC to crack down on businesses and individuals that mislead investors. 

VBit Founder Accused of Misleading Bitcoin Mining Investors

Danh C. Vo, aged 37, founded and led VBit Technologies Corp., a company that presented itself as a simple entry point into Bitcoin mining. Vo promoted the business as a way for everyday people to earn steady returns without needing technical knowledge or hands-on involvement. 

Under his leadership, VBit attracted widespread attention from retail investors seeking exposure to digital assets. According to the U.S. Securities and Exchange Commission (SEC), Vo and VBit raised more than $95 million from about  6,400 investors. 

The funds came from individuals who believed they were participating in a legitimate and well-run Bitcoin mining operation. VBit offered investors two main options. Some purchased mining machines directly, while most chose hosting agreements. 

These agreements promised that VBit would operate mining rigs on behalf of investors and deliver profits from the mining activity. This structure appealed to customers who wanted returns without managing equipment themselves. 

However, regulators said Vo controlled every major aspect of the company. This includes marketing, website content, and investor account information.

SEC Says VBit CEO Misused Investor Funds

The SEC alleged that VBit sold hosting agreements for far more mining machines than the company actually operated. Regulators say Vo either knew or failed to care that the number of active mining rigs did not match investor commitments. 

Investors depended entirely on VBit’s operations to earn profits, leading the SEC to classify the hosting agreements as securities under federal law. Instead of using investor money to expand mining operations, Vo allegedly diverted $48.5 million for personal use. 

Regulators say he spent some of the funds on gambling and expensive gifts for family members.

SEC Charges VBit Founder With Fraud

In November 2021, Vo filed for divorce and left the United States. Authorities say he departed with the remaining misappropriated funds, leaving investors without answers and the business without leadership.

The SEC also claimed that Vo transferred $5 million to relatives and his former wife, all of whom now face legal action as related defendants.

The SEC has now charged Vo with fraud and with offering and selling unregistered securities. Many major companies in the U.S. have faced similar charges as VBit’s founder. Earlier this year, Coinbase faced a class action lawsuit after a judge ruled against it for selling certain crypto assets without registration.

Furthermore, although VBit was acquired by Advanced Mining Group in 2021, the Bitcoin mining firm no longer operates. Regulators describe the company as defunct.