By the SEC's later account, at times the company sold more hashpower on paper than existed across the entire Bitcoin network, an accounting gap that only works if new money keeps arriving to cover what's owed to people who bought in earlier. Payouts to early Hashlet buyers came largely from cash paid in by newer investors rather than from any mining actually taking place. More than 10,000 people bought Hashlets, some from over 100 countries, drawn in part by Garza's high-profile presence in the Bitcoin world at the time.

Diabolical!