Reginal Thomas
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$40.7 million Awarded in SEC case over bitcoin Ponzi scheme

Bitcoin Savings and Trust and its owner have been order buy a U.S. federal judge in Texas to pay $40.7 million after the SEC ruled that the company, which sold investment using bitcoin was a Ponzi scheme. Judge Amos Mazzant said Trendon Shavers "knowingly and intentionally" used his company "a Ponzi scheme" promising investors that he would use their bitcoin to generate profitable returns with their investments. Instead he used their invests to pay his rent, food, and casino trips. Between February 2011 and August 2012, Shavers used the online name "pirateat40" to raise over 732,000 bitcoin, while promising investors up to 7% in weekly interest to be paid based on his ability to trade bitcoin. According to court papers Shavers used new bitcoin to repay earlier investors.