SEC Files New Motion Against Alleged Ponzi Scheme GAW Miners

The US Securities and Exchange Commission has filed a motion for entry of default against the cryptocurrency mining company GAW Miners.

AccessTimeIconJan 7, 2016 at 4:52 p.m. UTC
Updated Mar 6, 2023 at 2:51 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

UPDATE (8th January 05:55 BST): This article has been updated with additional information.


The US Securities and Exchange Commission (SEC) has filed a motion for entry of default in its ongoing case against the now-defunct cryptocurrency startup GAW Miners.

The filing alleges GAW Miners and ZenMiner, two firms mentioned in the SEC’s suit filed last month, have failed to respond to an official complaint.

Notably, the filing does not mention CEO Josh Garza, who was charged with securities fraud tied to the issuance of the firm's Hashlet mining contracts and the operation of a Ponzi scheme after a months-long investigation ended in December.

The SEC's case against GAW came months after the firm collapsed amid growing scrutiny and suspicion that it was operating fraudulently.

According to the 6th January filing, a response to the SEC’s complaint by GAW Miners and ZenMiner was due by 28th December. 

The SEC said in its filing that next steps may include a request for an entry of default judgment and court time to determine damages against the companies, writing:

"Accordingly, following entry of default by the Clerk, the Commission will file a Motion for Entry of Default Judgment with supporting memorandum and exhibits, and may also seek a further hearing to determine the amount of damages against both GAW Miners and ZenMiner pursuant to Fed. R. Civ. P. 55(b)(2)."

SEC attorney Kathleen Shields wrote in an attached declaration that "neither GAW Miners nor ZenMiner has filed an answer or otherwise responded to the complaint as of today".

GAW Miners has been the subject of default entries in the past. A case filed by a Mississippi-based utility firm ended with default judgment of roughly $346,000 after the firm failed to respond to the suit.

Garza's defense attorney, Marjorie Peerce, declined to comment when reached.

The motion for entry of default can be found below:

Image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.