"He sold "hosting agreements," which promised investors a share of profits from bitcoin mining rigs operated by VBit. Most customers chose this passive investment option rather than purchasing rigs themselves. He misrepresented how many mining rigs were actually operational, effectively selling more hosting agreements than the company could support. "While some investors received returns, others suffered substantial losses," the complaint stated. Vo either knew or was reckless in not knowing that the company could not meet the obligations tied to the hosting agreements."
"The SEC said the hosting agreements qualify as securities because investors relied on Vo and VBit's efforts to generate profits. In addition to the misappropriation, Vo allegedly transferred $5 million to family members, including his ex-wife, mother, brother, and sister, the commission said. He reportedly left the U.S. with the remaining misappropriated funds following his divorce in November 2021. Several family members are named as relief defendants in the lawsuit and have consented to disgorge the funds they received, pending court approval, per the SEC."
The U.S. Securities and Exchange Commission charged Danh C. Vo with defrauding investors and misusing funds raised through VBit Technologies Corp. Vo raised over $95.6 million from roughly 6,400 investors by selling hosting agreements tied to bitcoin mining rigs. Many investors chose the passive hosting option, relying on Vo and VBit to operate rigs and generate profits. Vo allegedly misrepresented the number of operational rigs and sold more hosting agreements than the company could support, causing some investors to incur substantial losses. The SEC alleges misappropriation for gambling, cryptocurrency purchases, and gifts, including $5 million transferred to family members. Several family members have consented to disgorge received funds pending court approval; VBit was acquired in 2022 and is now defunct.
Read at Bitcoin Magazine
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