First bitcoin securities fraud case ends in 18-month sentence

A Texas man has been sentenced to 18 months in prison for carrying out what prosecutors said was the first bitcoin securities fraud case.

Trendon Shavers was sentenced Thursday in Manhattan federal court. Judge Lewis Kaplan said Shavers committed a serious crime but had earned leniency through the honest work he's done since his 2014 arrest.

The judge said Shavers, of Prosper, Texas, carried out a classic Ponzi scheme after offering potential investors high interest rates to turn over bitcoins, the that operates outside of . Shavers said he "royally messed up."

Authorities say that at the peak of the scheme, Shavers possessed about 7 percent of all bitcoins in public circulation.

Prosecutors said Shavers caused about half of 100 investors to lose all or part of their bitcoin investment from September 2011 to September 2012.


Explore further

Texas man pleads guilty in NY bitcoin securities fraud case

© 2016 The Associated Press. All rights reserved.

Citation: First bitcoin securities fraud case ends in 18-month sentence (2016, July 21) retrieved 13 November 2019 from https://phys.org/news/2016-07-bitcoin-fraud-case-month-sentence.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
30 shares

Feedback to editors

User comments