In a landmark case involving the first-ever federal securities fraud involving bitcoin, a Texas man identified as the operator behind a Ponzi investment scheme has received a sentence of 18 months in prison.
Trendon Shavers, aka “Pirate@40” was sentenced to 18 months in prison for the charge of one count securities fraud due to his bitcoin investment scheme operated as the Bitcoin Savings and Trust (BCS&T).
Furthermore, the 33-year-old Texan also received 3 years of supervised release while being ordered to pay a little over $1.2 million in forfeiture and the same amount again in restitution.
According to a press release posted by the US Department of Justice, statements revealed in open court during the conviction revealed that Shavers solicited investments in BCS&T on the popular Bitcointalk forum Shavers offered investors up to7% returns weekly on their investment, with an annuzalised interest rate of 3,641% every year. He also told investors that they could withdraw their bitcoin from BCS&T at any time.
Altogether, prosecutors alleged that Shavers had obtained approximately 146,000 bitcoins from investors, a figure amounting to $807,380 based on the average price of bitcoin over the duration of the investment scheme. At the time of publishing, that amount of bitcoin is worth approximately $97.5 million.
Prosecutors also said that Shavers controlled about 7 percent of the total number of bitcoins in circulation at the time, during the peak of the scheme.
Shavers, who was arrested in November 2014 , plead guilty in September 2015 and showed contrition in court during the sentencing. Reuters revealed that Shavers, who now supports himself as a cook, stated that he “royally messed up” in court.
He also reportedly added: I don’t think this is something I’m ever going to get over. In statements, US Attorney Preet Bharara said: Applying a modern spin to an age-old fraud, Trendon […]
