Josh Garza’s Paybase Stops Withdrawals, Accused of Going ‘Full Blown Mt. Gox’

Paybase users report that they are unable to withdraw their funds.

Photo: Paybase

Photo: Paybase

Users of Bitcoin exchange Paybase, operated by Bitcoin mining company GAW Miners, have recently reported that they have been having difficulties in withdrawing funds.

According to CoinFire, a Bitcoin news website, and its sources, that the company and its CEO Josh Garza were under Securities Exchange Commission (SEC) investigation. Looking back, Coinfire cited “1,000 pages of a [leaked] investigation file” on Tuesday, January 20, 2015.

The investigation included accusations that Paybase were undertaking “fraudulent conduct in the sales of securities” in relation to the sale of Paycoin. Users are able to buy Paycoin by using Bitcoin, and using Paybase can trade between the two.

Besides, there has been an opinion among the representatives of Bitcoin community for months that GAW Miners may be a scam, or at least could be engaged in illegal activities. There have been threads both on BitcoinTalk and Reddit with titles like “GAW Miners – Liars, Frauds – A brief recap of what we know.

Furthermore, Garza didn’t present at the North American Bitcoin Conference in Miami. He has preliminary canceled his speech and Q&A session without giving a specific reason to the organizers of TNABC.

However, in January, 2015, Josh Garza launched Paycoin Honor Program. Under the program, Paycoin owners will be able to sell back the currency to Paybase at a $20 price.

Paybase set up the minimum monthly collective payment of $100,000. Given the “payments from the Company to Sellers [to] be made on the first of each month”, Paycoin holders unlikely to receive any payments until April.

This time, on February 27th through to March 8th, Paybase suspended all withdrawals, claiming that they were the victims of “a coordinated and very sophisticated effort to exploit the databases for Paybase and ZenCloud”.

thread on r/Bitcoin Sunday from user u/contractmine accused GAW Miners of going “full blown Mt. Gox on everyone” with the user saying:

“Withdrawals have been stopped for 7 days, GAW refuses to answer why and when they will resume. Josh Garza refuses to answer questions, support threads get closed on hash talk, and if you tweet him, he will block your account. I can’t withdraw bitcoins and they’ve been stuck on PayBase for a week.”

There are other users who had difficulties in making withdrawals from Paybase. There appeared several threads of people being unable to withdraw funds from the service on Twitter during the last week. Besides, it turned out that, someone identified as a GAW Founder on Hashtalk, the website which is fully owned by the company, claimed to be having problems as well.

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