Bitcoin Firm Head Charged in First-of-Kind Ponzi Case
A Texas man who ran a firm that claimed to make virtual currency-based investments was accused of masterminding a $4.5 million Ponzi scheme in what U.S. prosecutors said was a first-of-its-kind case tied to bitcoins. Trendon Shavers, founder of Bitcoin Savings and Trust, raised at least 764,000 bitcoins by promising investors a return of as much as 3,641 percent, prosecutors said. Instead, he used bitcoins from new investors to cover payments owed to earlier clients, while also tapping into the currency to pay for his own Las Vegas gambling and spa treatments, they said. At the peak of his scheme in 2011 and 2012, Shavers held about 7 percent of all bitcoins in circulation, they said.