Tuesday, July 23, 2013
Texas Man Ran Bitcoin Ponzi Scheme, Says SEC
The Securities and Exchange Commission said Tuesday that it has charged a Texas man with defrauding investors, as part of a Ponzi scheme using the Bitcoin virtual currency. According to the SEC, it alleges that Trendon T. Shavers, who founded and operated the Bitcoin Savings and Trust (BTCST), had raised at least 700,000 Bitcoin (around $4.5 million), and instead of investing that Bitcoin, used it to pay for his personal expenses, using the investments from new investors to pay interest payments to older investors. The SEC said that Shavers, who lives in McKinney, also was using the Bitcoin to pay for rent, utilities, food, retail purchases, and gambling.
The SEC said that Shavers defrauded investors in Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania. The SEC said it seeking a court order to freeze the assets of Shavers and BTCST in addition to other relief, including permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.
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