GAW MINERS CEO SENTENCED TO 21 MONTHS IN PRISON FOR FRAUD WITH CRYPTOCURRENCIES - Buy Bitcoins News profitable bitcoin Mining

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  • GAW MINERS CEO SENTENCED TO 21 MONTHS IN PRISON FOR FRAUD WITH CRYPTOCURRENCIES

    A federal court in Hartford, United States, sentenced Homer Joshua Garza, CEO of GAW Miners, to 21 months in prison for the fraud with cryptocurrencies related to the sale of computing power for cloud mining, and the commercialization of a token called PayCoin.
    cryptocurrency fraud

    According to information published in local media this September 13, Judge Robert Chatigny also ordered the restitution of $ 9.2 million to investors of the scheme led by Garza between May 2014 and January 2016. It is added that the accused, he must report to prison in January 2019 to serve his sentence until 2021, date from which he will have six months of house arrest and then be three years under supervision.
    GAW Miners was founded in 2014, with headquarters in Bloomfield, and specialized in the manufacture, supply and sale of hardware for cryptography. It sold to users - in association with ZenMiner and ZenCloud - the rights to profit from a portion of computing power to perform cloud mining .
    The companies offered $ 8 million in alleged shares and sold physical products and computing power for mining, which, together with a digital contract, were called hashlets . More than 10,000 investors participated in this purchase, which was promoted as profitable and not perishable.
    GAW Miners and ZenMiner were closed and sued in 2015 by the Securities and Exchange Commission of the United States (SEC), after allegations of operating as a Ponzi scheme , which were followed by another civil suit in 2016, for offering operations shares of mining without having enough hash power for the offer they promised.
    Subsequent investigations, conducted by the US Department of Justice through the Connecticut Office of the US Attorney, determined that GAW Miners also lied about buying an $ 8 million stake in ZenMiner and guaranteed investors a minimum price $ 20 for the purchase of a native token : PayCoin (XYP).
    To promote the commercialization of XYP, the companies claimed that they had a reserve of $ 100 million to maintain the price offered, which was false. Concerning this, the federal prosecutor of the Connecticut office, Deirdre Daly, who processed the case, pointed out that GAW Miners promoted the entry of new clients and used the proceeds of the most recent sales of PayCoin to pay the oldest investors , who owed money.
    Garza pleaded guilty to Conneticut's prosecution in July 2017. At that time another judge imposed a judgment of approximately $ 9.1 million against him, plus $ 742,774 of interest for the trial, including a restriction by the SEC of participate directly or indirectly in the purchase and sale of securities with commercial objectives.

    ADVANCES AGAINST FRAUD WITH CRYPTOCURRENCIES

    This sentence to the CEO of GAW Miners occurs within the framework of a series of actions that regulators have been taking to avoid fraud with cryptocurrencies.
    In that sense, the SEC this week filed charges against the companies Crypto Asset Management and LP TokenLot LLC for operating without the permits and records indicated by the institution. Likewise, last August, the agency issued a prohibition order to Tomahawk Exploration LLC, for alleged fraud with the Tomahawkcoin cryptographic tokens (TOM), which were part of an Initial Coin Offer (ICO).
    In this same line of action, the North American Association of Securities Administrators (NASAA) is advancing Operation Cryptosweep , which since last May has opened more than 70 investigations into platforms dedicated to investment in cryptoactives that, in its opinion, work in a suspicious manner. .