Snowballs system: million-dollar penalty for bitcoin mining companies GAW Miners and Zenminer

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GAW Miners and Zenminer have sold computer services for Bitcoin-Mining, which was not available at all. More than 10 million US dollars are now due.

The US stock market supervisor SEC has been able to obtain a failure judgment against Bitcoin Mining service providers GAW Miners and Zen Miner before a US District Court. The supervisory authority accuses the companies and their founder, Joshua G., of having operated a snowball system that should draw investors’ money out of their pockets. According to the SEC, more than US $ 10 million in fine has to be paid, plus a fine of US $ 1 million for both companies.

The founder, Joshua G., has sold the “Hashlets” shares, which were allegedly “Hashlets” for the Bitcoin Mining, to 2015. In fact, both companies should have sold shares far beyond the existing computer capacity, so that a large proportion Of the investors were paying for fictitious services, so the regular distributions to existing investors were mainly not from mining profits, but from the funds of new investors, with some 10,000 investors investing almost 20 million US dollars in the system.
Fingered company takeover

Joshua G. had founded GAW Miners at the beginning of 2014, initially sold Mining hardware and then offered the hosting of mining hardware. For this, he founded his second company, ZenMiner, but deceived that it was an independent company that collaborated with GAW Miners – right up to a fake takeover by GAW Miners. Both companies are no longer active, but against their founder runs yet another procedure, which the SEC has strained.

Mining is used to maintain and validate the Bitcoin network. In order to enter a new block of transactions into the decentralized accounting file and to get a reward of currently 12.5 Bitcoin, the participating computers have to calculate a hash by the bet. Without expensive special hardware on ASIC basis and very cheap power, the mining can practically no longer operate profitably.

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