GAW Miners has been sued by the Mississippi Power Company (MPC) for unpaid electricity bills and breach of contract.
MPC is claiming $346,647.29, plus interest and court fees: $223,818.61 for unpaid services to its mining warehouse, $49,335.20 for special equipment such as transformers, and $73,493.48 for terminating contract eight months early.
The facility reportedly housed GAW’s mining operations, and according to a Wall Street Journal interview with CEO Josh Garza, was 180,000 square feet and had an electricity capacity of 15 MW.
Earlier this year, GAW abruptly ceased its mining services and later proceeded to halt withdrawals. According to the complaint, GAW requested MPC to terminate service in January, several days before customers started complaining of interruptions in service.
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CEO Garza said the lawsuit arose due to dispute over the “fee structure”.
Meanwhile, GAW’s Paycoin, which was promised to revolutionize finance as the “People’s Money” and was guaranteed a $20 floor, has crumbled another 40% to the equivalent of $0.15 apiece. Losses accelerated this weekend after more gradual declines totaling over 50% last week. The coin has now fallen to rank 18th in market cap, currently valued at $2.3 million.
The suit is latest in a series of developments signaling the unravelling and inevitable collapse of the company, by now widely recognized as a Ponzi-like scam operation. At the start of 2015, a time when the Garza train was still carrying much momentum, the collapse of GAW was one of our ten predictions for the year.
That the operation seemed legitimate to many, and its Paycoin maintained a lofty valuation for so long a period (nearly four months), one is reminded how vulnerable the industry can be in such a free-flowing, unregulated state. The industry hopes, however, that there will be less room for such schemes as it matures.