Man Accused of Running the First Ever Bitcoin Ponzi Scheme
A Texas man was charged with fraud in New York on Thursday, in what federal authorities claim is the first-ever Ponzi scheme involving the unregulated digital currency Bitcoin. Trendon Shavers, 32, who runs a company called Bitcoin Savings and Trust, allegedly raised the equivalent of 4.5 million by offering investors weekly interest rates of 7, Reuters reports. That translates to a 3,641 annual rate of return. Shavers is suspected of embezzling about 146,000 of the 764,000 bitcoins he raised between Sept. 2011 and Sept. 2012 and allegedly using the proceeds to buy a BMW sedan, spa treatments and a 1,000 steak dinner, among other things. If convicted, Shavers could serve up to 20 years in prison. "This case, the first of its kind, should serve as a warning to those looking to make a quick buck with unsecured currency," said U.S. Attorney Preet Bharara in a statement. Reuters