WASHINGTON (Sputnik) — The US government has accused Bitcoin mining companies and their founder Homero Garza of stealing money from investors, the US Securities and Exchange Commission Boston Regional Office Director Paul Levenson said in a release.
“As alleged in our complaint, [Homero] Garza and his [Bitcoin] companies cloaked their scheme in technological sophistication and jargon,” Levenson said on Tuesday. “They sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another.”
Bitcoin is one of the most popular cryptocurrencies or peer-to-peer payment systems that has no material form and allows users to make payments for goods and services online.
“From August 2014 to December 2014, Garza and his companies sold $20 million worth of purported shares in a digital mining contract they called a Hashlet,” the release noted. “Investors were misled to believe they would share in returns earned by the Bitcoin mining activities.”
The Securities and Exchange Commission explained they seek permanent injunction in addition to the return of the monies to those schemed by the Bitcoin mining companies. The Commission also said they will seek interest on the monies in question and any additional appropriate penalties.