US: federals premiere a Bitcoin-related Ponzi scheme fraud arrest

Friday 7 November 2014 13:14 CET | News

US federals have, for the first time in the world, charged Trendon Shavers with criminal activities for fostering a Bitcoin-related Ponzi scheme, reports.

Prosecutors said the defendant used to promise investors absurdly high interest in exchange for turning over their Bitcoin to him. Investors were falsely promised that their Bitcoin was recoverable at any time.

Preet Bharara, US attorney of Manhattan, has claimed that the defendant cheated investors between 2011 and 2012 and that, at one point in the scam, he held as much as 7% of all Bitcoins being circulated.

Shavers reaped as many as 764,000 Bitcoins, valued at about USD 4.5 million, the authorities said. They said he used Bitcoin from new investors to make payments to other investors or to cover a Bitcoin withdrawal and that around 48 of 100 investors lost all or part of their investment.

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Keywords: US, federals, Bitcoin, Ponzi scheme, fraud, arrest, criminal, foster, caharged, sentenced, investors, cheat
Categories: DeFi & Crypto & Web3
Countries: World
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