Bitcoin Ponzi Schemer Pleads Guilty

A 33-year-old Texan man pleaded guilty to running a Ponzi scheme involving bitcoins, making it the first ever U.S. criminal fraud case related to the cryptocurrency.

Texas native Trendon Shavers has admitted to operating a Ponzi scheme running $4.5 million worth of bitcoins, Reuters reports.

Shavers aka “pirateat40” while online, was arrested in November, a couple of months after being ordered to pay $40.7 million in a U.S. Securities and Exchange Commission civil lawsuit related to the Ponzi case.

The case is a milestone, with prosecutors noting that it is the first U.S. criminal securities fraud case related to Bitcoin.  bitcoin-225079_1280

“I know what I did was wrong, and I’m very sorry,” –  Shavers said while being prosecuted in court.

In a plea deal, Shavers agreed not to appeal against any sentence at or below 41 months in prison.

The Quick Con

Shavers started his company, Bitcoin Savings Trust in 2011 and used it to offer promises of high rewards to investors over the Internet by collecting bitcoins.

The con? A return of one percent interest, every three days. In other words, a staggering seven percent per week.

Most of the bitcoins collected duly

Read more ... source: CryptoCoinsNews