A Texas federal judge has halted the SEC’s case against Geosyn Mining LLC, a Bitcoin mining company, after criminal charges were filed against three executives.
CEO Caleb Ward, COO Jeremy McNutt, and former sales manager Jared McNutt are accused of misusing customer funds for personal expenses instead of investing in mining equipment.
Following their surrender, Ward and Jeremy McNutt appeared in court to face indictments for wire fraud, with prosecutors claiming that Geosyn was running a fraudulent scheme disguised as a legitimate mining operation.
The SEC, initially hesitant to pause the lawsuit, agreed to the stay after considering new legal arguments from Ward’s defense team.
Prosecutors allege misuse of investor funds
According to court documents, Geosyn executives deceived investors by promising returns from Bitcoin mining activities. However, funds were diverted for personal use, including extravagant expenses such as luxury vacations and expensive purchases.
The criminal complaint states that Ward, Jeremy McNutt, and Jared McNutt falsified financial reports to maintain the facade of profitability, using new investors’ money to pay returns to existing clients.
With the departure of Jeremy and Jared McNutt from the company in October 2022, the SEC’s lawsuit targeting Geosyn’s mining agreements has been put on hold. Judge Mark Pittman has requested briefs on the potential impact of recent statements from President Trump and acting SEC Chair Uyeda on the case.
In response, Ward and McNutt’s legal team argued that pausing the lawsuit would provide time to assess the implications of the Trump administration’s stance on crypto regulation. The SEC, initially resistant, ultimately agreed to the stay after reviewing the motion.
“The SEC initially resisted, but after reviewing our arguments, they agreed,” stated Jeff Daniel Clark, Ward’s attorney.