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Author Topic: Bitcoin startup GAW Miners reportedly under SEC investigation  (Read 993 times)
Coinbuddy (OP)
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January 21, 2015, 05:44:35 AM
 #1

The Securities and Exchange Commission (SEC) has opened an investigation of GAW Miners and its CEO Josh Garza, according to CoinFire, a Bitcoin news site, which on Tuesday cited “1,000 pages of a [leaked] investigation file."
GAW was first introduced to the Bitcoin public around a year ago, and first came about re-selling Bitcoin mining rigs. Later, the company shifted to cloud-based mining, and more recently, it introduced its own altcoin, dubbed “Paycoin.” GAW also runs its own cloud-based wallet service (Paybase), its own cloud-based mining service (ZenMiner) and its own online discussion board (HashTalk).

For months, there has been active speculation amongst the Bitcoin community that GAW may be a scam, or at least could be engaged in illegal behavior. There have been threads both on BitcoinTalk and reddit with titles like “GAW Miners - Liars, Frauds - A brief recap of what we know.”

CoinFire did not publish the documents but described them to include a “bombshell draft of a potential enforcement litigation action against the company.” It cited SEC draft language accusing GAW of being in violation of Section 17(a) of the Securities Act of 1933, an anti-fraud provision.

Neither Garza, nor Amber Messer, his assistant, nor Joe Mordica, the company’s chief technology officer, immediately responded to Ars’ request for comment.

Judith Burns, a spokeswoman for the SEC, when asked to confirm CoinFire’s reporting, simply e-mailed: “Decline comment.”

Beyond the ongoing Silk Road trial, the Federal Trade Commission has filed a lawsuit against Bitcoin miner maker Butterfly Labs. Another California-based mining firm, HashFast, is winding down its bankruptcy proceedings. A third company, CoinTerra, was sued last year (the case since went to private arbitration) and is involved in a contract dispute with its Utah-based data center.
Bitcoins for bodyguards?

In a phone interview with Ars earlier this month, Garza said that he “started the company because of scammers.” He claimed that he first heard of Bitcoin around a year ago, at which point he tried to buy a hardware mining rig, and “spent $100,000 for a product I never got.” He declined to say which company he purchased from.

“I'd never had any experience with that—realizing a couple weeks later that these guys didn't care how much money I can afford to lose,” he said. “I got really frustrated and thought we should start a company to try to fix this.”

Garza told Ars that GAW made “over $1 million in sales our first month,” adding that within a few months, “we leveled at $60 million to $80 million per year.”

He claimed the company has 100,000 customers at present, with “10,000 to 15,000 new accounts per day.”

As of this writing, GAW Miners is only selling two hardware miners, and appears to no longer be selling its cloud-based mining product, known as Hashlets, which were available as recently as earlier this month.

Garza did not speak as scheduled at the North American Bitcoin Conference, held in Miami earlier this week, according to Moe Levin, one of the conference’s organizers.

“We publicly stated that we offered Josh Garza an opportunity to speak, and for attendees to have an opportunity to respond,” Levin told Ars, adding that although he didn’t speak, Garza was at the conference.

“He was at a bottle service table at The Clevelander [Hotel] at the kickoff party," he said. "We talked briefly and I welcomed him to the conference. He was surrounded by bodyguards—two or three large bodyguards that were blocking anyone from coming near him. I approached him to welcome him and his guards stopped me, until Josh said I was ok.”

SOURCE: http://arstechnica.com/tech-policy/2015/01/bitcoin-startup-gaw-miners-reportedly-under-sec-investigation/
Chef Ramsay
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January 21, 2015, 05:53:56 AM
 #2

I wouldn't want to be one of the advertisers of them on here. Technically, they're part and parcel to a conspiracy to do whatever on here. Not saying, just thinking. I wouldn't take another payment from them if ya know what I mean.
Coinbuddy (OP)
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January 21, 2015, 06:58:20 AM
 #3



Keep in mind the single source for this "news leak" is coinfire.cf

Not one other single legit site is reporting this.

Coinfire has yet to produce a single shred of evidence to back anything up.

Even ArsTechnica clearly states the source is Coinfire.



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BTCIndia
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January 21, 2015, 07:06:20 AM
 #4

Where can I find leaked document?

He's Nick Sazbo from Washington. I've my answer. Or Hal? :O
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January 21, 2015, 07:14:03 AM
 #5

This is not the first time that I read negative press about them. Just stay away

tins
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January 21, 2015, 07:30:38 AM
 #6

This is not the first time that I read negative press about them. Just stay away

Unless it means getting back some of the scammed money he stole...then I say to not stay away...find an attorney!
Mass Civil suits!!!!  Cheesy
hilariousandco
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January 21, 2015, 10:08:33 AM
 #7

Where can I find leaked document?

You probably can't. It's likely fud or misinformation spread by someone for whatever reason.

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January 21, 2015, 10:14:40 AM
 #8

Where can I find leaked document?

You probably can't. It's likely fud or misinformation spread by someone for whatever reason.

Although it would probably bring the whole thing to the SEC's attention if it hasn't come to their attention already.

I wouldn't want to be one of the advertisers of them on here. Technically, they're part and parcel to a conspiracy to do whatever on here. Not saying, just thinking. I wouldn't take another payment from them if ya know what I mean.

No, just taking their money does not make you a conspirator. And the people who wanted the conference to give GAW's ad dollars back to them were being naive. You make a business plan, you have costs, these people pay your costs. Is the catering company going to return money for coffee and cookies because it originates from GAW? No. And it doesn't make them a contributor to a conspiracy either. GAW is the bad guy, and maybe any companies/newswebsites set up deliberately to promote them. Just accepting their advertising dollars is not a crime.

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Gervais
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January 21, 2015, 11:28:52 AM
 #9

There's a lot of shitslinging between mining companies and disgruntled users of them so it wouldn't surprise me if this was just slander by one of their competitors. Seems like there's lots of paid trolls around here that hassle certain companies.

Where can I find leaked document?

You probably can't. It's likely fud or misinformation spread by someone for whatever reason.

Although it would probably bring the whole thing to the SEC's attention if it hasn't come to their attention already.

How do you know it hasn't? (I'm don't believe it has either but would like to know how you're so sure?).
Searing
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January 23, 2015, 06:08:08 AM
 #10


The SEC could be 'investigating gaw" as they state..but that may not mean much I contacted the SEC in Fall (oct)  of 2013 and they said they were 'investigating" BFL
as an example...and it took them till like june 2014 to actually have the FTC act (as to the SEC not idea my complaint was lack of IRS compliance and such...maybe
they did nothing because it did not apply to SEC and only FTC?) ...whatever...so the act of 'investigation' does not mean much....depends on how much 'traction' imho that it
actually gets ...in my case they told me both SEC and FTC ...again...they were 'investigating' and added my name to a list ..but it was don't email us anymore (jeez only did  3 emails)....
FTC finally acted....no idea if SEC ever did or if IRS will do so yet?

so it goes could be a long time for any type of redress ....look how long BFL pulled this stuff off prob fall 2012 till spring 2015 when FTC got involved.....(they also
told me to call them ..the FTC if I did not receive my BFL miner in 9 months to a year (this was again oct ? 2013.....back then they were treating asic miners like
a lost television set.....same you are on the list comment as SEC

anyway hopefully that has improved and these 2 agencies are more on the ball then that now on the 'scam' shelf life of a miner

anyway only thing I had in GAW was the tagline from when they were a miner equip mnfg to hashnet....had to drop the gaw tagline when they changed to paybase/paycoin
that was a step too far imho...you want to 'cloud mine' fine you are an adult do your research ....you want a see a tagline on gambling btc sites fine you again are an adult
and have free choice (taglines are billboards imho)...but you start making your own coin and pre-mine and kinda rig the game like imho they did with paycoin ..hey that is
a 'bridge to far' so to speak..but again BEFORE I realized where it was all going

to be completely honest I  made $$ on tagline and made $$$ for 7 days on the paycoin POW got out of tagline after the paycoin/paybase change of tagline
that and have nothing in paycoin/gaw etc at all ...just to put it out there....but to be fair when I started they just offered equip then cloud mining then went comletely
snake oil ..hell...probably with hashlet ....although I now folk that made money ...er ie got out in time I should say in /at DEC 2013 on hashlet anyway...

anyway my 2c worth

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January 23, 2015, 06:14:09 AM
 #11

hopefully GAW gets slapped with a ludicrous fine at the least; theyve done too much to give bitcoin a negative light in public
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January 23, 2015, 02:23:20 PM
 #12



Keep in mind the single source for this "news leak" is coinfire.cf

Not one other single legit site is reporting this.

Coinfire has yet to produce a single shred of evidence to back anything up.

Even ArsTechnica clearly states the source is Coinfire.



~BCX~

they have a track record of making good investigations (maybe the best of all crypto-news sites). so thats enough for me to give them some trust.

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January 23, 2015, 02:28:42 PM
 #13

Haha 1000 pages of a leaked file??? I'm glad that an obscure bitcoin newsgroup was able to find them 

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January 23, 2015, 04:04:05 PM
 #14

Haha 1000 pages of a leaked file??? I'm glad that an obscure bitcoin newsgroup was able to find them 

who is not obscure in bitcoin? Smiley
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