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Man arrested for large Bitcoin Ponzi scheme

Written by Andre Yoskowitz (Google+) @ 09 Nov 2014 20:46 User comments (3)

Man arrested for large Bitcoin Ponzi scheme Trendon Shavers of Texas has been arrested on securities and wire fraud after he allegedly ran a large Bitcoin-related Ponzi scheme.
Shavers allegedly started an online digital hedge fund and raised millions. Each count carries a max sentence of 20 years and millions in fines. The SEC already filed civil fraud charges against Shavers last year, and he owes $40 million in fines for that conviction.

Under the handle Pirateat40 on the ForumBitcointalk.org forum, Shavers solicited about 100 investors to place their Bitcoins in Bitcoin Savings and Trust (BST), an online fund in which he promised weekly returns of 7 percent. In his solicitation, he explained the returns were achieved through "Bitcoin arbitrage activities that included acting as a middleman for individuals who wished to purchase large quantities of BTC 'off the radar.'"

As the Ponzi scheme grew, the minimum investment was set at 100 Bitcoin (BTC), which at that point was worth about $1000. By August, 2012, well before Bitcoin began its massive run to $1200 per BTC, Shavers closed down the fund, declaring that there was no money left. In total, he had brought in 700,000 BTC, about 7 percent of the entire float of BTC and had returned 500,000 BTC to investors as supposed interest. Shavers is accused of stealing another 150,000 BTC and transferring to his own BTC wallet.

Source:
Forbes

Tags: Fraud Bitcoin
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3 user comments

110.11.2014 15:20

Bitcoins are a SHAM

Bitcoin users are SCAMMERS

Bitcoin is WEAK NONSENSE.

It appears to me that the majority of those NERDS engaging in 'wearable tech' are truly bitcoin enthusiasts. Correlation: NERDIEST NERDS ALL-TOO-OFTEN ENGAGE IN THE MOST MEANINGLESS GARBAGE!!


NERDS!

211.11.2014 14:59

bit-coins are currently what the tulip bulbs Holland were to the 1800s... as long as there are two jag-offs willing to pay outlandish amounts of other valuables for them then their value will continue to increase. but as soon as there is only one, like the tulip bulbs of yore, it too will go into a death spiral bankrupting anyone who trusts bit-coin with their life savings


qazwiz is qazwiz everywhere. If you see me say HI!

318.11.2014 8:15

Trendon Shavers of Texas made just one mistake. You can't run scams from Texas. You have to have your offices on Wall Street in New York. Rest of the country is out of bounds. Then you can just throw a few bitcoins in the direction of SEC regulators and enjoy your lifestyle.

This message has been edited since its posting. Latest edit was made on 18 Nov 2014 @ 8:22

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