(Reuters) - U.S. regulators got the green light from a federal judge to proceed with their lawsuit against a Texas man accused of running a Ponzi scheme using Bitcoin, the virtual online money system.
Trendon Shavers of Bitcoin Savings & Trust had challenged the Securities and Exchange Commission's case against him, saying the regulator had no jurisdiction to sue him because the Bitcoin investments he offered are not securities or subject to any U.S. regulation.

But U.S. Magistrate Judge Amos L. Mazzant in the Eastern District of Texas ruled on Tuesday that his Bitcoin investments "meet the definition of investment contract, and as such, are securities."

Bitcoin exists through an open-source software program. It is not managed by any one company, it is not regulated by any central bank, and its supply is controlled through a computer algorithm. Users can buy bitcoins through exchanges that convert real money into the virtual currency.

The SEC warned investors against the dangers of potential scams involving virtual currencies like Bitcoin in an alert on July 23, the same day it filed the charges against Shavers.

Tuesday's ruling could have important implications for the still murky legal world surrounding digital currencies, which is not regulated by the United States.

Bitcoin has come under greater scrutiny after U.S. authorities in May seized two accounts linked to a major operator in the Bitcoin digital market.

The judge's decision could be important for Cameron and Tyler Winklevoss, the twins who became famous after alleging that Facebook Inc founder Mark Zuckerberg stole their website idea.

In early July, they applied to the SEC for approval to launch a Bitcoin-tracking exchange-traded product known as the Winklevoss Bitcoin Trust.

The SEC alleges that Shavers essentially used money from new investors in his Bitcoin endeavor to cover withdrawals by older investors and his own personal expenses.

The agency said he raised at least 700,000 bitcoins, or $4.5 million, from investors in multiple states.

Shavers had asserted that his Bitcoin investments are not securities because Bitcoin is not money, but the SEC countered that they constituted both investment contracts and notes.

"It is clear that Bitcoin can be used as money," the judge wrote. "It can be used to purchase goods or services."

Shavers could not be immediately reached for comment.

I think $1000 is the price a lot of people are anticipating. It's high enough that much of the 'old money' in this economy will start to rumble and awaken from their slumber. I'm not sure if the price could reach a sustainable $1000, as it is the sweet spot for a lot of people. Thoughts?

Sooo little volume, yet so much trading engine lag.

Edit: OK, looks like the trade engine is simply down right now.

I think the "300k by the end of year" does not happen. It would have been nice but the facts point the other way now.

That we experienced a runup from (about) 10 to (about) 100 in the first months of this year is an amazing feat. Hopefully you all were invested at the time. The weekly and monthly charts speak for the resilience of bitcoin price. The overshoot 100->300 was for the lucky few who managed to cash out.

Long term, if bitcoin, or crypto in general, is to have any impact in society at large, it must be 100-1000 times bigger. Thus any prices we see in the remainder of this year, will be cheap.

how do you know if a wall is fake or not?

Cool story bro, tell it again.