Every time a new topic trends on the Internet, scammers take advantage of it.
You must have heard of Bitcoin and how in recent days it has made some early investors millionaire overnight.
Yes, the Bitcoin boom is back, and it's real — a digital currency that has just crossed a new milestone today. The current price of 1 BTC or 1 Bitcoin = US$2,850.
An American con man took advantage of this boom in Bitcoin market to run bogus bitcoin mining schemes and earn millions of dollars.
But the bogus schemes ended as the United States Securities and Exchange Commission (SEC) has won a legal battle against two bogus, but now defunct, Bitcoin companies operated by Homero Joshua Garza — GAW Miners and ZenMiner.
Garza is now facing a $12 Million (£9.2 Million) penalty for running the bogus schemes – what lawmakers have certified was a "Ponzi scheme."
According to the SEC, Garza used the "lure of quick riches" in order to get people to invest in the bitcoin mining schemes, which means those who add their computing power to help verify transactions, a practice known as mining, are rewarded with Bitcoins.
Garza's GAW Miners and ZenMiner purported to provide shares in cloud-based Bitcoin mining machinery, but nothing like that was ever built by the operator.
Garza told investors that he had enough computing power to mine a lot of bitcoins on their behalf and share the proceeds, but in reality, he just used cash from new investors to reward earlier joiners, which is nothing but a fraudulent "ponzi" scheme, according to the SEC.
