A US federal judge has signed off on a final judgment against Homero Josh Garza, the CEO of the now-defunct cryptocurrency mining firm GAW Miners.
The judgment, entered on October 4, comes less than two years after the Securities and Exchange Commission (SEC) first filed suit against Garza, GAW Miners and ZenMiner, a related firm. Garza was accused and charged with violating securities laws through the offering of so-called "Hashlets," or "virtual miners" which were sold to customers through an internal exchange.
Today's judgment follows a guilty plea from Garza, given in July, in a related criminal case pursued by the U.S. Justice Department. Garza plead guilty to a single wire fraud charge and faces sentencing early next year.
In the SEC's civil case, Garza has been held liable for $9,182,000, an amount that the court order said will be "deemed satisfied by the order of restitution that will be entered against him when he is sentenced in the related criminal case." It comes after the agency won a default judgment against GAW Miners and ZenMiner for $11 million in disgorged profits and civil penalties.
GAW Miners, prior to its collapse, previously offered hosted mining services. It later moved into the cloud mining business, through which customers can purchase hash power generated by hardware owned by the miner. But in the case of GAW, the firm didn't actually possess as much hash power as it sold – prompting a harsh rebuke from federal prosecutors in their original complaint from December 2015.
"Though cloaked in technological sophistication and jargon, defendants' fraud was simple at its core – defendants sold what they did not own, and misrepresented the nature of what they were selling," they wrote at the time.
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