27 Aug '12, 7pm

Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt

Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt

Remember pirateat40, the e-currency banker we speculated could be the Bernie Madoff of Bitcoin ? Well, it looks like he owes a lot of people money. On August 17, pirateat40 announced the closure of Bitcoin Savings & Trust , a virtual hedge fund that promised to pay high rewards to investors who parked their Bitcoins there. Ten days later, investors are still waiting to get paid and pirateat40 is on the defensive. "When I know, you will," says his away message in the fund's official chat room, an effort to quiet the loudening chorus of, "WHERE ARE MY BITCOINS ?" Pirateat40 consistently maintained that he made his money legitimately through secret investment strategies. The announcement that BS&T was shutting down was similarly vague and obtuse : The decision was based on the general size and overall time required to manage the transactions. As the fund grew there were large...

Full article: http://www.theverge.com/2012/8/27/3271637/bitcoin-savings...

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