Bitcoin investors are seeing unheard of profits. The current price of a Bitcoin has increased to $2,850.

With huge profits to be earned, an American con man decided to do it the easy way and ran bogus bitcoin mining schemes to earn millions of dollars.

The United States Securities and Exchange Commission (SEC) took notice and pursued a legal battle against two bogus Bitcoin companies operated by Homero Joshua Garza — GAW Miners and ZenMiner.

Garza is facing a fine of $12 Million for running the scheme which lawmakers determined was a "Ponzi scheme."

Holding out the lure of quick riches, Garza convinced people to work with him by adding their computing power to help verify transactions.

Garza promised investors he had enough computing power to mine the Bitcoins, but in reality he just took their money to reward earlier joiners.

According to the SEC, about 10,000 investors joined the bogus schemes and handed over $20 Million to Garza.

The court sided with the SEC and fined both GAW Miners and ZenMiner to pay a combined of $10,384,099 along with a $1,000,000 in damages.

With the huge increase in the price of a Bitcoin, the original $20 Million that Garza took from investors is now worth around $150 million.

Source: The Hacker News