PirateAt40 Facing Charges

For quite some time now Bitcoin has been the subject of numerous frauds, scams, ponzi schemes and other attempts to trick people out of their hard-earned digital money. It’s also been the case for some time that these things simply happened and those responsible vanish into thin air with no consequences – but all that just changed.

This morning the U.S. Securities and Exchange Commission issued a press release in which they allege that Trendon Shavers (more commonly known to the Bitcoin community as PirateAt40, as the founder of Bitcoin Savings and Trust) ran a massive Bitcoin Ponzi scheme. Given that Shavers’ real name has been discovered and to the best of my knowledge he still lives in the U.S. it seems likely that this time there will be actual consequences for this massive breach of trust.

Andrew Calamari, the director of the SEC’s New York Regional Office also offered up this quotable quote, which serves as an excellent summation of not just the SEC’s reaction to the BTCST incident, but also of the regulatory mood surrounding Bitcoin in general.

Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws.

Intended or not, the undertones of this quote are obvious: The regulators don’t think that Bitcoin is special or magical. It’s just another financial implement similar to any other currency, stock or commodity. This represents the first truly serious prosecution in the Bitcoin community – and it’s being done in our defense.

This SEC complaint says loudly and clearly that, even in the eyes of regulators, Bitcoiners are just normal folks who should be offered the same protections as all other U.S. citizens and criminals are criminals no matter what currency their fraud is denominated in. The line has been drawn and I, for one, like where they drew it – let’s hope this is where it stays.

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-- Download PirateAt40 Facing Charges as PDF --