Readers may recall with avid disgust the charades of one Josh Garza, former CEO of miner turned scam company GAW Miners, who recently plead guilty to massive fraud. Now, the SEC says they are not done with him and want his former company to pay $12 million in reimbursements and civil penalties.
Strangely, this doesn’t effect Garza personally very much. The companies, which have no cash or assets between them, are certainly not worth $12 million. It would seem obvious that the people who plead guilty to fraud should not be protected under any corporate guise – they cannot hide the misdoings of themselves behind the shells of allegedly upstanding organizations. This is to say, anything Garza may do in the future which is profitable should first have to recompense the many people he victimized in his “cloud mining” scam, forever tainting the mining industry and putting us on high alert to anyone at all who comes into the space.
In 2015, the SEC took action against Garza and others who were scamming in the mining industry. Up until the bitter end, an apparently large crowd of people seemed determined to make Garza, and their collective cryptocurrency, Paycoin, a success, to the detriment of them all. Garza perhaps profited the most in his ponzi mining scheme, but ultimately everybody lost, including him.
It begs the question of whether the victims will be compensated regardless. It’s interesting that perhaps victims lose because the law does not make it seem like an obvious move to go after Garza for his own money in order to compensate for his malfeasance. Instead, the government is supposed to extract the funds from bankrupt, non-existent companies.
This makes absolutely no sense, and it really illustrates the problem in Bitcoin. People are perhaps to eager to believe that things are going well when they see alleged figures on a screen telling them how much they’ve made. The Paycoin scandal, after all, reached a crescendo when they began selling items through Amazon Prime for Paycoins. In the beginning, the coins were supposed to buy $20 worth of merchandise each, but this simply did not hold, as the price promise itself never held.
Bitcoin has always been particularly attractive to scammers and other criminals, but this is no different from cash. The difference is that it’s more notable with Bitcoin, perhaps a bit easier in the digital realm, because Bitcoin is still new. Hopefully in the future Bitcoin will instead become associated with numerous good things instead of a mix of good and bad things.
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Last modified: May 21, 2020 9:46 AM UTC