SEC Files Charges Against 2 Companies Over USD20 Million Bitcoin Ponzi Scheme

In a recent complaint filed by the US Securities and Exchange Commission, the regulator alleges that a Vermont man and the two companies he controlled have illegally took in at least USD20 million dollars from over 10,000 investors in what seemed to be a giant Ponzi scheme. According to the filing, Homero Joshua Garza, GAW Miners, LLC, and ZenMiner, LLC violated multiple federal securities laws, and that he and the two firms will be sought injunctive relief, disgorgement of ill-gotten gains, imposition of civil monetary penalties, and prejudgment interest.

Paul G. Levenson, Director of the SEC’s Boston Regional Office, said in a statement, “As alleged in our complaint, Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another.”

Forbes.com said that the filing is the second conducted by the SEC involving allegations of a Ponzi scheme involving Bitcoin. In July 2013, Texas native Trendon Shavers was the subject of the regulator’s enforcement action for operating a Ponzi scheme via Bitcoin arbitrage trading. He was later filed with criminal charges in November 2014, and subsequently pled guilty.