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Author Topic: BREAKING: SEC Charges pirateat40 With Running Bitcoin-Denominated Ponzi Scheme  (Read 43965 times)
threeip
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July 23, 2013, 05:47:17 PM
 #1

https://www.sec.gov/servlet/Satellite/News/PressRelease/Detail/PressRelease/1370539730583#.Ue7BndLvuHO

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SEC Charges Texas Man With Running Bitcoin-Denominated Ponzi Scheme
  FOR IMMEDIATE RELEASE
2013-132 Washington D.C., July 23, 2013 — The Securities and Exchange Commission today charged a Texas man and his company with defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online.

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The SEC alleges that Shavers, who lives in McKinney, Texas, paid 507,148 Bitcoin in investor withdrawals and purported interest payments.  He transferred at least 150,649 Bitcoin to his personal account at an online Bitcoin currency exchange.  Shavers suffered a net loss from his day trading, but realized net proceeds of $164,758 from his sales of 86,202 Bitcoin.  Shavers transferred $147,102 from his personal account at the online Bitcoin currency exchange to accounts he controlled at an online payment processor as well as his personal checking account.  He used this money to pay his rent, utilities, and car-related expenses as well as for food and retail purchases and gambling.


Full text here in case source goes down/changes.

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flix
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July 23, 2013, 05:48:04 PM
 #2

Extremely funny. I guess he wasn't so hard to find after all...
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July 23, 2013, 05:49:02 PM
 #3

Wow, I didn't know SEC can go after Bitcoin (and other "digital currencies")...

Oh, and this thread is a duplicate.
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July 23, 2013, 05:52:55 PM
 #4

That Ponzi scheme collapsed last year. The guy behind it ripped off people for around $5 million. The SEC has charged him with a crime, which is what they're supposed do. It was a classic Ponzi scheme ("7% a month returns"); it just happened to involve Bitcoins.
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July 23, 2013, 05:58:38 PM
 #5

WOW! For everyone who have been following this story, this is really wow worthy news.
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July 23, 2013, 06:00:31 PM
 #6

make me nervous about my money in coinlenders now. my heart jumped when i first read it

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July 23, 2013, 06:01:07 PM
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Is this the same as the scotaloo character? If so:


♫ This situation, which side are you on? Are you getting out? Are you dropping bombs? Have you heard of diplomatic resolve? ♫ How To Run A Cheap Full Bitcoin Node For $19 A Year ♫ If I knew where it was, I would take you there. There’s much more than this. ♫ Track Your Bitcoins Value
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July 23, 2013, 06:01:53 PM
 #8

Unbelievable how stupid this guy is. Ripping off that much bitcoin and ending up with so little $, moving it all into the exchange at once, putting his name out there and thinking he can get away with it.

This is great news, a big slam it the face of everyone saying that agreements made over internet with "stupid internet money" can't be prosecuted. I'll be using this case for all it's worth.

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July 23, 2013, 06:02:39 PM
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Next up: Hashking aka Sam Theofanopoulos, 7262 W Benton Dr Frankfort, IL 60423

I really hope they go after all the PPTs and the Starfish too.
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July 23, 2013, 06:04:38 PM
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Very good news Smiley finally a bit of closure whether i get my money back or not.

threeip
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July 23, 2013, 06:06:11 PM
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Unbelievable how stupid this guy is. Ripping off that much bitcoin and ending up with so little $, moving it all into the exchange at once, putting his name out there and thinking he can get away with it.

Not to mention 'pay his rent, utilities, and car-related expenses as well as for food and retail purchases and gambling'...

A guy told me one time, "Don't let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner"

Foolish fools do foolish fool things  Roll Eyes

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July 23, 2013, 06:08:51 PM
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we should all go visit him in prison and get our last laugh!

♫ This situation, which side are you on? Are you getting out? Are you dropping bombs? Have you heard of diplomatic resolve? ♫ How To Run A Cheap Full Bitcoin Node For $19 A Year ♫ If I knew where it was, I would take you there. There’s much more than this. ♫ Track Your Bitcoins Value
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July 23, 2013, 06:09:12 PM
 #13

Unbelievable how stupid this guy is.

He's just a little smarter than the people that gave their bitcoins to him and won't ever see them again.
BorderBits
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July 23, 2013, 06:17:34 PM
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The SEC should have deferred to BTCTalk for punishment.  A bunch of fucking idiots who believed 7% weekly returns are a possibility should be happy with their scammer tag above his avatar.  It would be a real shame if all of the fucking morons who threw their bit at such stupidity were able to recoup anything.   
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July 23, 2013, 07:08:07 PM
 #15

The only question is: where is the money?
Someone obviously took it, and IMO pirateat40 was just a poor sucker, in all this scam.

Check out gocoin - my original project of full bitcoin node & cold wallet written in Go.
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July 23, 2013, 07:18:57 PM
 #16

Well, well, well. About damn time.

Read the whole complaint (the actual indictment) here.

I hope they keelhaul him and flog his co-operators.
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July 23, 2013, 07:42:58 PM
 #17

The only question is: where is the money?
Someone obviously took it, and IMO pirateat40 was just a poor sucker, in all this scam.

Didn't he ''invest'' the coins in another ponzi?

greyhawk
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July 23, 2013, 07:47:03 PM
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The only question is: where is the money?
Someone obviously took it, and IMO pirateat40 was just a poor sucker, in all this scam.

Didn't he ''invest'' the coins in another ponzi?

Nope. According to the indictment he invested them into his gut.
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July 23, 2013, 07:47:33 PM
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The only question is: where is the money?
Someone obviously took it, and IMO pirateat40 was just a poor sucker, in all this scam.

Didn't he ''invest'' the coins in another ponzi?

You know what? That's a valid point! Maybe not a ponzi, per se, but a business. I believe that Trendon Shavers was the VC that funded BF Labs Inc. I think the SEC should look into Butterfly Labs to make sure that wasn't the case. It sure would explain why BFL never stated who the VC was, in spite of many request.





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July 23, 2013, 07:49:39 PM
 #20

Good riddance. Glad to see justice is being served.
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