25 Jul '13, 10am

Texas man charged with running $4.5 million Bitcoin Ponzi scheme

Texas man charged with running $4.5 million Bitcoin Ponzi scheme

The Securities and Exchange Commission has charged Trendon T. Shavers with running an illegal Ponzi scheme using Bitcoins. Using the online handle “pirateat40,”authorities claim the Texas man received some 700,000 Bitcoins from various investors through an unregistered fund he created called Bitcoin Savings & Trust. The SEC alleges Shavers told investors he could make them a seven percent return on their investment through arbitrage. The problem was, however, he never made any trades. Instead, he would use money from new investors to pay the promised dividends to earlier investors. This method allowed him to continue to run his scheme and appear legit to new investors. Naturally, there was a great deal of skepticism around this program and others like it but for some, the lure of quick money (and sheer greed) was simply too powerful. Officials say Shavers continued to run ...

Full article: http://www.techspot.com/news/53357-texas-man-charged-with...

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