Digital Bitcoin Mining Fraud

Former Connecticut Resident Pleads Guilty to Criminal Charges in Connection With Digital Bitcoin Mining Fraud.

The SEC alleged that GAW Miners and ZenMiner, along with their principal, Garza, purported to offer shares to investors in their digital bitcoin mining operation. Mining for bitcoin or other virtual currencies means applying computer power to try to solve complex equations that verify a group of transactions in that virtual currency. The first computer or collection of computers to solve an equation is awarded new units of that virtual currency. According to the SEC’s complaint, GAW Miners and ZenMiner did not own enough computing power for the mining they promised to conduct, so most investors paid for a share of computing power that never existed. Returns paid to some investors came, not from successful mining activity, but from proceeds generated from sales to other investors.

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