The US Securities and Exchange Commission (SEC) has filed charges opposite dual bitcoin mining businesses it says operated as bootleg Ponzi schemes.
According to a complaint [PDF] a watchdog filed with a US District Court in Delaware, GAW Miners and Zenminer, both tranquil by Josh Garza, mount indicted of holding income dictated for mining operations and regulating it to compensate other investors.
The SEC alleges that a dual companies, who billed themselves as cloud computing operations clinging to mining bitcoins, never indeed had a hardware required to perform a computing tasks compared with cryptocurrency mining.
Both GAW Miners and ZenMiner charged business for a rights to use dedicated bitcoin mining “hashlet” hardware hosted remotely. Users were led to trust that they were purchasing entrance to a cloud-based mining machines, with a guarantee that their income would be returned when a cryptocoins were mined.
Instead, a SEC charges, Garza and his dual companies used a estimated $19m that a 10,000 business paid for a hashlet rights to line their possess pockets or compensate out earnings to early investors rather than indeed cave bitcoin.
Ultimately, a SEC alleges, Garza’s companies never owned a hardware indispensable to broach a betrothed payouts, and instead reverted to a