SEC charges bitcoin mining firm VBit CEO involving $48.5 million misappropriated in bogus investment deals

The U.S. Securities and Exchange Commission charged Danh C. Vo, founder and CEO of a bitcoin mining business called VBit, and said he misappropriated $48.5 million, spending some of those funds on gambling and gifts for his family.

The SEC said Vo, 37, and VBit Technologies Corp. raised over $95.6 million from about 6,400 investors, according to a complaint filed on Wednesday in the U.S. District Court for the District of Delaware. The SEC said Vo lied to investors about how his bitcoin mining business worked and how he planned to use investors' money.

The SEC said that Vo said VBit would offer investors "a turnkey solution for average people to start making a passive income stream through Bitcoin mining without all the headaches of operating the machines."

There were two ways for investors to get into bitcoin mining through Vo — mining rigs themselves or through entering into "hosting agreements" that gave them "passive profits from mining rigs." Most VBit customers chose the second option, the SEC said in the complaint.

"The complaint alleges that Vo, through VBit, sold Hosting Agreements for far more mining rigs than VBit was actually operating," the SEC said.

The SEC said Vo either knew or was "reckless in not knowing," that VBit was not managing enough mining rigs to line up with how many hosting agreements were being sold.

"As the founder and CEO of VBit, Vo had ultimate authority over the entire company and directed the information posted on the company’s website, in promotional materials, and what was reflected in investors’ online accounts," according to the complaint.

The SEC also said that the hosting agreements are securities in part because Vo "led investors to expect profits derived from the efforts of third parties."

The SEC said Vo sent $5 million to his family members and ex-wife, who are listed as defendants. Then, in November 2021, Vo, previously a Philadelphia resident, filed for divorce and left the U.S. with the rest of the funds he misappropriated.

The SEC charged Vo specifically with charges involving the unregistered offer and sale of securities and fraud. VBit was acquired by Advanced Mining Group in 2022, and the bitcoin mining firm is now defunct, the SEC said.