A Cloud Mining Conspiracy : GAW Miners
If you are a cryptocurrency enthusiast, then you already knows about it's popularity. Cryptocurrencies are rising exponentially and current market capital at the time of writing this, stands at a whopping $154 Billion. This is a ginormous amount for something which started off few years ago. People are investing heavily in cryptocurrencies now than they have ever before. Some invest directly into Cryptocurrency via Crypto Exchange and some invest in Crypto Cloud Mining firms.
GAW Miners was once a cloud mining firm but due to it's bogus and ponzi schemes, it got shut down when it's founder and CEO, Josh Garza, found guilty for the violation of securities law and ponzi scheme running under the name of cloud mining firm GAW Miners. Josh Garza was fined a hefty amount of $12 Million for running ponzi scheme and misleading the investors under the name of Cloud Mining Firm.
Now, Lets understand What Is Cloud Mining And How It Works?
Bitcoin and many other cryptocurrencies has to mined in order to approve the transactions across users. Miners are those people who set up powerful pieces of Hardware in order to 'mine' the transactions and in return they get some 'Bitcoins or Satoshi's' for their work as payment. But mining is a very expensive work and not everyone can afford to setup big mining devices in their houses. So, in order to solve this problem and help people to earn for mining, Cloud mining services came into existence.
Cloud mining services are being offered by many large firms who setup these large and expensive piece of hardware by themselves and offers their mining services to normal users in form of Investment. As per Bitcoin mining system, every miner earns 12 BTC per block (subject to change as per consequences). One block time is approx 10 minutes. So cloud mining firms earns 12 BTC effectively per 10 minutes with a single pool. So in order to get benefited, investors invest their money into Cloud Mining services and in return they get ROI from the amount cloud companies received as mining fees.
This system works perfectly nowadays and People are earning huge, only if the Company is genuine. After watching the cryptocurrency potentiality, many 'Scams' firms came into existence to get rewarded along the way by misleading people to invest their hard earned money into a 'scam' mining service or crypto coin.
GAW Miners was evicted by US Securities and Exchange Commission in December 2015 on the grounds of Security violations and in June 2017 GAW Miners was found guilty and got shut down after its CEO Josh Garza was fined a hefty amount.
What was the Issue and Conspiracy Theory About GAW Miners?
In simple words, GAW Miners was a cloud mining company which had a business model of selling digital cloud mining services and a related product named 'hashlets'. Hashlets are products by GAW miners, basically a piece of their data centers which allows users to mine many cryptocurrencies with much speed and efficiency sold through a platform named ZenCloud. Hashlets were available from the hashing speed of 1 MH/s to the whopping speed of 10GH/s.
It was a piece of hardware which can be run through home with much efficiency by connecting it with your computers like regular miners and sync it with GAW Miner servers by filling in the code, received with hashlet, on Zen Account. Hashlets offered convenience and user could manage their mining work from anywhere and manage their payout as well. GAW Miners earned a fortune by selling hashlets when there was a scarcity of mining equipment because of high demand.
Josh Garza had also made announcements that GAW Miners made some deals to work with e-commerce giant Amazon and Walmart. Of course, it was a ruse and there were no proof existed back then about those 'deals' and still any proof haven't found yet.
GAW Miners Potential 'Claims' Which Actually Turned A Means Of Scamming People
The Court found RAW Miners and its CEO and Founder Josh Garza guilty on more than one ground. RAW Miners was guilty on following grounds:
- The so called 'Hashlets' offered by them came under unlicensed securities and they had no right to sold them at first place.
- GAW Miners didn't have enough hardware power in their mining warehouse to support all the requests they accepted by investors. Basically, they didn't even know the business they were conducting and how cloud mining works.
- There were no proof of so called 'deals' they made with Amazon or Walmart and it was just a ruse to attract more investors.
- Zencloud was also considered a scam platform made by GAW Miners to sell their under-rated and unlicensed Hashlets.
These were the enough grounds to found GAW Miner firm guilty and as a result a whopping $12 Million fine was issue on it's CEO.
Some say it was a Conspiracy by people with power to divert cryptocurrency investors to Cloud Mining services and to make a fall in crypto market capitalization. Well, conspiracy or not, it got shut down in the end.
So, there are many cloud mining firms and services which exist even today which are close to been declared a scam. We would recommend every Crypto enthusiast to do his own avid research before making any investment in Cloud mining services.
Thanks for reading ..!!
