TIME U.S. Crime Man Accused of Running the First Ever Bitcoin Ponzi Scheme He allegedly raised the digital equivalent of $4.5 million by offering insanely high interest rates <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
If convicted, Shavers could serve up to 20 years in prison. <\/p>\n
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. <\/p>\n
[Reuters] <\/p>\n
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Bitcoin: Man Accused of Running Ponzi Scheme<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" TIME U.S. Crime Man Accused of Running the First Ever Bitcoin Ponzi Scheme He allegedly raised the digital equivalent of $4.5 million by offering insanely high interest rates 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. Continue reading