The U.S. Securities and Exchange Commission (SEC) has taken significant legal action against Danh C. Vo, the founder and CEO of VBit Technologies Corp., a bitcoin mining company, charging him with defrauding investors of approximately $48.5 million. The SEC’s complaint, filed in the U.S. District Court for the District of Delaware, outlines serious allegations regarding Vo’s management of investor funds and the operations of his business.
Vo is accused of misleading investors about the true state of VBit’s operations while raising over $95.6 million from around 6,400 investors between December 2018 and February 2022. He sold “hosting agreements” that promised a share of profits from bitcoin mining rigs supposed to be managed by VBit. Many investors opted for these agreements as a passive investment route, rather than purchasing and operating their own mining rigs. However, the SEC’s complaint notes that Vo misrepresented the number of operational rigs, selling more agreements than the company could realistically support.
While some investors reported returns, many experienced significant losses. The SEC alleges that Vo either knew or acted recklessly regarding the company’s inability to meet the obligations associated with these agreements. At 37 years old, Vo held complete sway over VBit, including all promotional materials, website content, and investor account data.
The SEC further claims that in addition to misappropriating funds for personal uses, including gambling and cryptocurrency purchases, Vo transferred about $5 million to family members. This group included his ex-wife, mother, brother, and sister. Following his divorce in November 2021, he allegedly departed the U.S. with a significant portion of the misappropriated funds. Several of his family members have been named as relief defendants in the suit and have reportedly agreed to return the funds they received, subject to court approval.
VBit Technologies Corp. itself is now defunct, having been acquired in 2022 by Advanced Mining Group. The SEC’s lawsuit seeks not only the return of the misappropriated funds but also civil penalties and a ban on Vo participating in future securities offerings.
This legal action occurs at a time when Congress is actively debating federal measures to combat cryptocurrency scams. A bipartisan proposal on the table aims to establish a dedicated task force to identify and address fraud within the burgeoning digital asset sector. The SEC has emphasized that Vo’s alleged conduct serves as a crucial reminder for investors to thoroughly scrutinize claims of passive income in the cryptocurrency space and to ensure operations are transparent and verifiable.
