I really thought I was done writing about Paycoin, at least for a while, until the hammer comes down in the form of SEC and DOJ raids. Then, media darling, GAW CEO and Paycoin founder Josh Garza drops a gem like this into my lap and my hand is forced. Paycoin will be in the news again, and once again for things it probably doesn’t want to be in the news for.
Late last night, Josh Garza jumped on the hashtalk.ch forum to post an alleged chat between him and former part owner of FastXPY, Phil Vadala. The post was copy and pasted, so there is no way to independently confirm the information. Few would be surprised to find out that the conversation was edited or even completely fabricated. But that isn’t important.
It isn’t important because Josh Garza posted the alleged conversation thinking it would somehow validate his crusade against Phil Vadala over the ownership of some 15 Paycoin Prime Controllers. Instead, he reveals that he allegedly owes Paycoin to “Middle Eastern” and Russia mafia members, and that if Vadala doesn’t pay up, Vadala’s life and family will be at risk.
Prime Controllers are essentially hyper staking wallets that generate 100% interest on the coins deposited into them. Only a few dozen Prime Controllers exist and they are held by several elite groups in the remains of the Paycoin community.
Garza stops short of threatening Vadala physically himself, but makes it very clear that the people Garza says Vadala ripped off are not to be trifled with. He then says that he will give the criminal investors all the information on Vadala possible and that he will attack Vadala from “all sides”.
Assuming the conversation isn’t completely fabricated, this means one of two things: Either at some point in Paycoin’s life, Garza got involved with organized crime investors and promised them the hyper staking prime controllers or, Garza was/is attempting to strong arm Vadala into surrendering the Prime Controllers using the threat of violence.
Garza also admits to spending at least some time in Dubai, which was long suspected by users, but he always denied.
The “any more” part would seem to clash with what he repeatedly told Paycoin users.
Garza cried foul when his information was leaked online, but “doxes” Vadala in this post and possibly to hostile, organized crime elements. The doxxing information has been removed below but other than minor formatting, remains unchanged.
“none, [01.05.15 08:07] I would MUCH rather deal with the SEC than what you’re about to deal with
none, [01.05.15 08:08] Lost of people lost money, and I was saving those coins to make some very large investors whole
none, [01.05.15 08:08] and you took that from them
none, [01.05.15 08:08] I have given them all your information
none, [01.05.15 08:09] Driver’s License: [REDACTED] Date of Issue: [REDACTED]
none, [01.05.15 08:09] Thats all they needed
Phil Vadala, [01.05.15 08:13] You got the wrong licence number, you should update your records.
none, [01.05.15 08:13] keep your family close bud
none, [01.05.15 08:13] thats all I got to say”
Garza has since claimed that he only gave the investors Vadala’s information because they stated they were seeking legal action. That does not explain away the fact that immediately afterwards he told Vadala to “keep your family close bud” or why he also failed to remove the information when posting the conversation online.
Worse still, is a later part of the conversation that implies Garza was providing the likely violent criminals (if they exist at all) with Vadala’s information at least up until the conversation with Vadala (and clearly after he realized they intended to be violent).
The basis of the argument: who controls 15 Prime Controllers, is a minor note compared to what Josh Garza posted himself. The truth is that Paycoin will never be a viable coin so long as these Prime Controllers exist (and even then, its reputation has likely killed it) and are staking at 100% or higher, so it barely matters who controls them. Garza has also since claimed that Vadala has stolen more coins and the unsuccessful exchange mineral.com.
But again, that isn’t what is important here: What is important is that Garza is either entangled with organized crime and ended up owing them a lot of money or is using dreamt up organize crime to threaten a former developer and his family.
The rest of the conversation largely mirrors the snippet above, with Garza strongly implying that men are coming to hurt Vadala if he doesn’t pay up. You can find the whole alleged conversation in the bizarre post, or if it has been removed by the time you read this, the Bitcoin talk forum Paycoin thread should have the relevant information (alternatively, interested readers can email me at firstname.lastname@example.org).
Garza then launched a Google Hangouts Chat where he confirmed that he is controlling the forum account that posted the seemingly damming Skype conversation. In that conversation, Garza claimed to be in the United States but refused to post any information that would confirm his location. He also claimed that he could not have been dumping XPY because he says he doesn’t have the technical knowledge to do so while hiding the fact that he is doing that.
Requests for comment from Josh Garza have gone unanswered, we attempted to ask questions on the public “Voice of Paycoin” Google Hangout, on the forum and through multiple email addresses. We have also contacted Vadala for confirmation on the conversation and other details and will update this space when and if he responds.
Again, the alleged conversation between Garza and Vadala may have been altered or never happened at all. If it did happen, his alleged criminal investors may not or may not exist. Vadala may or may not have some legal or moral claim over the Prime Controllers. I don’t know, because those are inner-Paycoin problems. There are a lot of things we don’t know and will likely never know. But we know this: Josh Garza posted this alleged chat because he thought it would help his cause. He thought people would see him as the sympathetic figure and would help him report Valada to the authorities.
I just want to know what he plans to do when the authorities come for him.
EDIT: Just before publishing, Vadala responded on the forum by posting three Paycoin addresses that he says were used to scrape Prime Controllers onto Cryptsy. This information has not been confirmed independently, and we are currently looking into it. Readers can look at the blockchain information themselves here, here and here. The amounts each address has received sits between 44,000 and 353,000 XPY. All three addresses are currently empty.
Garza finally responded to our emails, stating that he would comment tomorrow, but refused to comment today (despite the fact that it was his comments that sparked this). We will update this space if and when we get actual comments.
Update: Garza has responded to our emails but ignored the bulk of our questions, taking time only to state that the Prime Controller scraping addresses accusations lobbied by Vadala were not true, but failed to elaborate with proof or argument on the manner. He stated simply “They are not accurate”
We will continue to update as necessary.