TL;DR
- The SEC accuses Danh C. Vo of using VBit as a front: he raised $95.6M with promises of passive income and diverted $48.5M that lacked any real operational backing.
- The scheme relied on hosting contracts that promised mining returns, but VBit sold agreements covering more rigs than it actually operated, creating a structural mismatch.
- The regulator classifies those contracts as unregistered securities, details $5M in transfers to family members, and says Vo left the U.S. after diverting the funds.
The SEC took the VBit case to court with a clear accusation: Danh C. Vo used a bitcoin mining company as a facade to raise funds and siphon off nearly half of the money collected. The complaint lays out a simple, repeatable, and effective scheme built on a passive income narrative that was never supported by the promised infrastructure.
VBit raised more than $95.6 million from around 6,400 investors. The pitch framed bitcoin mining as an accessible financial product. Vo offered a “turnkey solution” designed to remove technical complexity and generate income without operating equipment. In practice, the business focused on hosting contracts, the option chosen by most customers. These agreements promised returns derived from mining rigs supposedly managed by the company.
The SEC Uncovers the Scheme Behind the VBit Fraud
The core issue was not market volatility or poor operational performance. According to the SEC, VBit sold contracts tied to far more machines than it actually had running. The company lacked the mining capacity needed to back the commitments it made. The complaint argues that Vo either knew about this mismatch or acted recklessly by ignoring it while continuing to raise capital.
Vo’s control over the company was absolute. He directed the content of the website, promotional materials, and the information displayed in investors’ online accounts. That control made it possible to project the image of a solid operation while the funds were diverted elsewhere. The SEC states that at least $48.5 million was misappropriated for personal expenses, including gambling and transfers to family members.
Vo Diverted Millions and Fled the United States
A significant portion of the money ended up beyond investors’ reach. Vo sent roughly $5 million to family members and his ex-wife, who are also listed as defendants. In November 2021, he filed for divorce and left the United States with the remaining misappropriated funds, according to the regulator.
The agency classified the hosting contracts as unregistered securities. The key factor is the expectation of profits derived from the efforts of third parties, a central element of the U.S. regulatory framework. On that basis, the SEC brought charges for fraud and for the unregistered offer and sale of securities.
VBit was acquired by Advanced Mining Group in 2022 and no longer operates today. The case sends a direct message to the crypto market: when mining is packaged as a financial product, regulatory scrutiny arrives quickly and forcefully, especially when the numbers fail to add up both on-chain and on the books
