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Bitcoin Ponzi Scheme Operator Pleads Guilty to Securities Fraud
Bitcoin ponzi scheme perpetrator Trendon Shavers has plead guilty to securities fraud and is now awaiting sentencing.
By Pete Rizzo
Updated Sep 11, 2021, 11:53 a.m. Published Sep 21, 2015, 9:48 p.m.
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Bitcoin Ponzi scheme perpetrator Trendon Shavers has plead guilty to securities fraud, a decision that reverses plea of not guilty submitted in March.
Shavers faced up to 20 years in prison for defrauding investors out of an estimated $4.5m while operating Bitcoin Savings & Trust (BS&T). The investment scheme, which promised investors 7% returns on bitcoin market arbitrage activity in 2011 and 2012, became the object of a US Securities and Exchange Commission (SEC) inquiry in July 2013.
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According to a report by Bloomberg, Shavers will now serve anywhere from 33 months to 41 months in prison as a result of the plea deal, and pay a $5m fine.
“I know what I did was wrong and am very sorry,” Shavers said in a court hearing, according to the news source.
Shavers was ultimately found to be engaging in a Ponzi scheme whereby money from new investors was used to issue "interest payments" to new investors. Further, he exchanged bitcoin into US dollars to pay personal expenses, investigators found.
As a result of an initial inquiry, Shavers was forced to pay $40m in penalties for violating anti-fraud and securities laws in September of 2014. He was subsequently arrested again on criminal charges in November of that year.
A 9th September filing in the case previously revealed that US Attorney Preet Bharara had postponed a pre-trial conference on the basis the parties were working toward an agreement.
Shavers is scheduled to be sentenced on 3rd February, 2016.
For more information, a full copy of the plea agreement can be found below.
Justice image via Shutterstock.
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