Landmark Crypto Crime Case Ends With Jail Sentence for GAW CEO

Josh Garza, the CEO of the now-defunct cryptocurrency mining company GAW Miners, has been sentenced to 21 months in prison after pleading guilty to a wire fraud charge.

Thursday's sentencing caps a years-long saga that began in 2014, with allegations that GAW was acting as a Ponzi scheme by selling more cryptocurrency mining processing power than the firm actually possessed.

The original allegations of fraud made against GAW - vociferously denied by Garza and other supporters at the time - ultimately proved to be true in the wake of the company's 2015 collapse and subsequent lawsuits initiated by the U.S. Securities and Exchange Commission and, later, the Justice Department.

GAW Miners, based in the United States, initially served as a reseller and distributor of mining equipment, later moving into the hosted mining business - that is, the firm would purchase and operate machines on behalf of its customers.

Toward the latter half of 2014, GAW began pitching the Hashlet, which the company sold through an in-house marketplace.

Opposition to GAW had been steadily growing, with a public gulf widening between the company's often-zealous clients on its official forum and opponents - in many cases customers or former customers themselves - on BitcoinTalk.

Even still, the coin was positioned as a payments-friendly altcoin with the backing of GAW. Yet as CoinDesk reported at the time, paycoin would ultimately fail due to the very same pump-and-dump tactics that Garza and GAW decried when launching it.

Subsequently leaked emails would also show that GAW had sold more mining processing power than it actually possessed.

In December 2015, Garza, GAW and ZenMiner, an affiliated mining company, were sued by the SEC for the unlicensed sale of securities and operating a Ponzi scheme, as CoinDesk reported at the time.

Nearly two years after the initial SEC lawsuit filing, a U.S. district judge held Garza liable for more than $9 million, a move that came months after the SEC's bid for an $11 million default judgment against GAW Miners and ZenMiner was approved.