Whenever there's a lot of attention on some hot new trend in the financial world, scammers are quick to capitalize on the wave of curious newcomers: such as two companies that took advantage of people's interest in digital currencies by roping them into a Ponzi scheme, according to the Securities and Exchange Commission (SEC), which recently announced charges against them. The companies, GAW Miners and ZenMiner, held themselves out to be mining companies, that is companies with the required computing hardware needed for the computationally intense task of creating new Bitcoins. The SEC said they offered people shares, $20 million worth, in this company, promising returns based on the new Bitcoins they would mine. In reality, however, neither actually had the ability to produce the return they were promising. Despite the slick digital veneer, the SEC said this was, in fact, a classic Ponzi scheme: while some investors did get returns, these were funded from share sales to new investors. 

  “As alleged in our complaint, Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office.