2012-09-27 Telegraph.co.uk - Bitcoin 'Pirate' scandal: SEC steps in

[Pteppic]

I saw this the other day and I don't think it has been listed yet.

http://blogs.telegraph.co.uk/technology/willardfoxton2/100007836/bitcoin-pirate-scandal-sec-steps-in-amid-allegations-that-the-whole-thing-was-a-ponzi-scheme/

With so much money at stake, especially with so many users being computer hackers or criminals, it was inevitable that there would be theft. There have been several disastrous hacks, with Bitcoin "banks" being cleaned out online and then shutting down overnight, leaving users nursing large losses. However, it is the most recent collapse of the so-called "Pirate" scheme that has drawn the attention of law enforcement agencies for the first time.

Bitcoin banks? Does he mean the exchanges?

[Foxpup]

Bitcoin banks? Does he mean the exchanges?

No. He's talking about the MyBitcoin fiasco. Though, he's got a lot of other things confused:

When Bitcoin was launched in 2008, each Bitcoin traded at three US cents each;

With such a tempting rate, many people piled in – as many as 500,000 Bitcoins were sent to Pirate, giving a value before interest of almost $7 million entering Bitcoin Savings and trust.

The allegation that Pirate was running a Ponzi scheme dropped the value of the currency by almost 30 per cent.