At last, Josh Garza, the founder of the PayCoin Ponzi scheme and CEO of GAW Miners pleaded guilty to wire fraud following an official complaint by the SEC filed in 2015.
The US Department of Justice’s letter read:
“We are currently negotiating an agreement with defendant Homero Joshua Garza to enter a plea of guilty to one count of wire fraud. A plea would result in a final resolution of this criminal matter without the necessity of going to trial. A plea hearing is scheduled in this case for June 1, 2017.”
In a period of 12 months, from 2014 to 2015, Garza and the rest of the GAW Miners team including former CTO Joe Mordica and ZenMiner head Eric Capuano scammed investors within the cryptocurrency market with a Ponzi scheme called PayCoin.
Introduced in early 2014, PayCoin was marketed by Garza and GAW Miners as a cryptocurrency designed specifically to gain massive mainstream adoption by providing stability in its price. According to the GAW Miners team, the price of PayCoin was to be stabilized or fixed at $20 after a certain period of time to provide a digital currency in which users can rely on for low volatility rates.
However, the majority of investors and traders within the cryptocurrency community recognized the fraudulent and scam-like proposition offered by Garza and GAW Miners at its early stage. Inevitably, the US Securities Exchange Commission (SEC) became involved with the case of PayCoin and Garza and filed a complaint against GAW Miners.
Traders and investors were able to discover the scam-like features of PayCoin due to its 12.5 million insta-mined coins and its fixed price offering. In order for a price of a cryptocurrency to be fixed, a centralized institution must be set in place which controls the market. In