SEC investigates GAW Miners for alleged mining Ponzi scheme

Photo: Josh Garza, CEO of GAW Miners

On August 19, the U.S. Securities and Exchange Commission (SEC) has sued Carlos Garza, a former employee of the cryptocurrency mining company GAW Miners.

According to the Aug. 14 filing, Garza has allegedly refused to comply with the SEC’s subpoena, as the enforcement agency is investigating whether GAW violated securities laws through the sale of its Hashlet mining products and the cryptocurrency Paycoin.

At the same time, the SEC is also investigating whether the company is operating a Ponzi scheme.

According to the document, Carlos Garza is the brother of GAW CEO Josh Garza and is suspected of being the main person selling mining products and paycoin. His testimony date took place on August 12, but he refused to answer questions.

The filing states:

“The SEC subpoenaed Garza to testify on Wednesday, August 12, 2015. Garza appeared for the deposition but refused to answer any questions. Garza also did not produce any documents requested in the subpoena, including one that he had earlier promised to produce.”

Court records show that Garza told the SEC during his testimony that he did not understand securities laws and was afraid to respond to questioning because no lawyer was present. In addition, Garza refused to answer basic questions about himself.

A request for comment was sent to GAW CEO Josh Garza but no immediate response was received.

It is reported that GAW Miners' mining operations stopped without warning earlier this year, and the price of paycoin they sell has shrunk to 0.025 cents.

In addition, GAW has been involved in several civil legal challenges, including an electricity dispute with Mississippi Electric Company.

Notably, the committee is also investigating whether GAW Miners’ mining service is a Ponzi scheme, where the company is suspected of selling non-existent mining computing power.

According to relevant sources, regulators in the state where GAW is located are also investigating the company.

－－－－