http://time.com/3571415/bitcoin-ponzi-scheme-trendon-shavers-bitcoin-savings-and-trust/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29
Nov. 6, 2014
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.
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 year.
