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Author Topic: BREAKING: SEC Charges pirateat40 With Running Bitcoin-Denominated Ponzi Scheme  (Read 44400 times)
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October 28, 2013, 04:14:10 PM
 #201

It was somebody's brilliant plan to purchase hundreds of thousands of coins, without moving the price.

I'm not sure I'd call pirate's scheme from the beginning a "plan", but it was definitely someone taking advantage of an opportunity he was creating.

pirateat40 deleted most of his posts on here, but you may remember he was asking either bitlane or smoothie (or both?) who they were, over and over again. Not sure if it was here or in IRC, but if here, he's since deleted those posts and they both appear to have selectively edited a few parts of their own. I'm not sure why I can't find this info again, but I know I saw something along these lines in August of last year, shortly after the run up to $15 and crash back down to $8. I checked a few of the threads where I was certain it was posted and its not there anymore.

Also, don't forget the Vandroiy bet (though I honestly think that was less opportunistic and more a warning).

I can think of a number of different ways you could game pirate's moneyPak to BTC (or vice-versa) operation if you knew exactly how it worked (and especially if you thought it was also a Ponzi):
Step #1: Become his best anonymous customer.
Step #2: Become his best anonymous investor.
Step #3: Make promises from both.
Step #4: Abuse trust.
Step #5: Profit.

Glad I never really got involved, this post was about the extent of my contribution:
https://bitcointalk.org/index.php?topic=92556.msg1024661#msg1024661

I feel bad for those that lost money, but keep in mind there's a few folks in that thread, brunic & usagi, notably, that even wanted to ban dissenting speak or wanted people to flat out "shut up". This forum, at the time of BS&T, was actually quite hostile to folks even suggesting it was a Ponzi or moneylaundering scheme, under the impression that if it wasn't, it'd be destroying a legitimate business.

I don't believe pirate actually thought that he was going to run a Ponzi or was planning on it. I think he had a solid but small moneyPak-for-BTC business model that worked on the scale of thousands of dollars, worked less reliably at tens of thousands, and utterly failed at hundreds of thousands. I also think his willingness to work with anonymous individuals probably sealed BS&T's fate.
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October 28, 2013, 05:08:39 PM
 #202


Also why cant the sec get anything on him if it really was a ponzi?


Actually if you read the court documents what's happened so far is that first Shavers tried the Sovereign citizen route claiming the court has no jurisdiction over him, which was promptly laughed out of court, then he was adviced to prepare an accounting of his finances which he promptly neglected to do then had a date to appear in court, which he promptly neglected to do and by now the court has frozen all of his personal accounts in response. The actual trial is gonna take some time (years).
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October 28, 2013, 05:41:25 PM
 #203


Also why cant the sec get anything on him if it really was a ponzi?


Actually if you read the court documents what's happened so far is that first Shavers tried the Sovereign citizen route claiming the court has no jurisdiction over him, which was promptly laughed out of court, then he was adviced to prepare an accounting of his finances which he promptly neglected to do then had a date to appear in court, which he promptly neglected to do and by now the court has frozen all of his personal accounts in response. The actual trial is gonna take some time (years).

So how does he buy food and hire a limo without funds?

Sometimes people upload things that happened a long time ago to their facebooks
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October 28, 2013, 05:43:16 PM
 #204


So how does he buy food and hire a limo without funds?

his FIAT bank account is frozen, but that doesnt stop him selling hidden bitcoins at localbitcoin places

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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October 28, 2013, 06:15:43 PM
 #205

Not to forget that some proxy services such as Paybtc's BitcoinMax most likely also scammed investors.

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October 28, 2013, 06:52:16 PM
 #206

Still, according to my definition to be a scammer one needs to have an intent to scam - and IMHO pirateat40 had no such intent. He was just an idiot and a total tool.

I disagree with the "no such intent" part; he already was a con man before getting involved with Bitcoin:
https://bitcointalk.org/index.php?topic=119590.msg1289098#msg1289098

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November 13, 2013, 10:26:50 AM
 #207

Whoa, whoa, whoa. He beat his wife after being charged, and now she's in a limo going to a haunted hay ride with him and the kids?

Well, hey - if you want to damage the man, fix the battered wife syndrome and have her leave him.
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