Pirateat40's Bitcoin Savings & Trust Ponzi Collapses
- Bitcoin
- CT Lore
Trendon Shavers, operating under the handle 'pirateat40' on Bitcointalk, ran Bitcoin's first major Ponzi scheme through his Bitcoin Savings & Trust fund. He promised investors 7% weekly returns and accumulated roughly 764,000 BTC (worth ~$4.5 million at the time, over $16 billion today). At its peak, Shavers controlled an estimated 7% of all bitcoin in circulation. When the scheme collapsed in August 2012, investors were left with nothing. Shavers was later arrested, fined $40 million, and sentenced to 18 months in federal prison.
Incident Details
- Type
- FRAUD
- Funds Lost
- $4.5M
- Status
- Total loss
Shavers was arrested in November 2014, fined $40 million by the SEC, and sentenced to 18 months in federal prison. The case became the first Bitcoin-related securities fraud prosecution.