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Person behind Bitcoin Mining Scam Faces $12 Million Fine

Avatar Gautham 3 years ago

The promoter of GAW Miners and Zen Miner cloud cryptocurrency mining service platform has been slapped with a hefty fine and charged for running a fake mining operation.

Mining cryptocurrencies is not just an exciting hobby, but a lucrative business opportunity as well. The use of computing power to crack cryptographic algorithms and get rewarded with fresh cryptotokens for the spent resources makes it attractive for many. What was supposed to be a democratic activity has now become exclusive to the resourceful, thanks to the ever increasing requirement for hashing power on some of the cryptocurrency networks.

Nowadays, only a handful of people with well-established data centers running custom state-of-the-art mining hardware command a majority of the total hashing power of various cryptocurrency networks. In order to meet the cost overheads, they allow people to invest in the hashing power, giving rise to the concept of cloud mining. While the cloud mining model by itself is a sustainable business model, there are those who tend to take advantage of increased demand for such opportunities.

Homero Joshua Garza is said to have attempted to dupe thousands of investors by operating a fake Bitcoin mining scheme successfully for a while now. However, the success was short-lived as he got caught soon after. According to a media report, Garza duped people by promising them great returns in a short period of time. He is said to have targeted unsuspecting investors in GAW Miners and Zen Miner by claiming that he is in possession of equipment capable of generating sufficient processing power to mine plenty of Bitcoin.

Those who ended up investing in the non-existing computing power unsuspectingly became part of Garza’s Ponzi Scheme. He is said to have tricked over 10,000 investors of more than $20 million, out of which only a few got their money back.

Homero Joshua Garza has recently been ordered to pay up $12 million in fines by the US Securities and Exchange Commission. In addition to the fine, Garza is also facing separate criminal charges for running a bogus scheme.

Ref: BBC | Image: NewsBTC
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