Buyer of BTC.com for $1million Charged with Operating a Ponzi Scheme

Back in August of 2014 there was a big buzz around the sale of BTC.com for $1million. Domain Guardians brokered the sale and Mike Robertson gave an interview to TheDomains.com on how the sale went down.

Today the buyer Josh Garza has been charged with fraud by the Securities and Exchange Commission.

CoinDesk reported:

The US Securities and Exchange Commission has charged former GAW Miners CEO Josh Garza with the fraudulent sale of unlicensed securities and the operation of a Ponzi scheme.

The complaint, filed today in the US District Court for the District of Connecticut, focuses largely on the sale of Hashlets, the “virtual miners” sold by GAW Miners through its cloud mining site, ZenCloud.

The SEC said that Garza and GAW earned roughly $19 million in revenue from the scheme, which evolved from hardware hosting to cloud mining to the eventual launch of an alternative cryptocurrency and has as many as 10,000 customers and investors.

According to the SEC, Garza and GAW Miners knowingly misrepresented the nature of Hashlets, their proclaimed profitability and the manner in which mining income was sourced.

The domain was registered in 1997 has been under privacy at Go Daddy for years. The site is developed but the about us talks about Bitmain Technologies LTD.

Tech Crunch did an interview with Garza on the purchase of BTC.com last year.

{ 3 comments… add one }

  • Eric Borgos December 4, 2015, 8:23 am

    Interesting. In 2014 I bought 1 Hashlet for $15.99 and I broke even with it. The entire business of virtual bitcoin mining pretty much ended when the price of bitcoin went down.

    Reply
  • Joseph Peterson December 4, 2015, 3:18 pm

    I’d be the first to admit that I know zilch about bitcoin.

    But it shouldn’t surprise any of us that Ponzi schemes pop up in unregulated industries wherever there’s a widespread desire to get rich quick. Sometimes it’s a ripoff artist stepping forward with a sure-bet money-making con. Sometimes it’s a natural bubble, arising from crowd psychology with no villainous master-mind at all.

    Domainers are especially vulnerable to this kind of exploitation. They have fallen prey to it in the recent past. And they will fall prey to it again.

    Reply
  • Adam December 7, 2015, 1:03 am

    What’s the ponzi scheme that was run in the domain space in the past ?

    Reply

Leave a Comment