Bitcoin Ruled Currency Allowing Ponzi Scheme to Proceed

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Bitcoin Ruled Currency Allowing Ponzi Scheme to Proceed
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For many, Bitcoin as an anonymous currency is a necessity for the future of free speech. For millions, dare I say billions, Bitcoin is a complete unknown and not something that they need concern themselves with any time soon. Additionally, there remain billions of people without computers. Billions without money. An online currency, anonymous currency will, I fear, forever be an unknown and a mystery for a large portion of the world’s population.

Bitcoin Ruled Currency Allowing Ponzi Scheme to Proceed

Bitcoin ruling

Today, however, may have marked the day when Bitcoin is known to millions more people with the ruling of United States District Judge Amos L. Mazzant in Texas today. Judge Mazzant, through his ruling, determined that the Securities and Exchange Commission could proceed with a lawsuit against a Texas man accused of operating a Ponzi scheme based on the popular virtual currency known as Bitcoin.

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The Commission brought civil charges against Trendon Shavers in late July, accusing the Texas man of raising nearly $5 million worth of Bitcoins from investors in his digital hedge fund. At today’s present exchange rate, that would amount to over $70 million. Mr. Shavers, prior to today’s ruling at argued that he should not be charged by the SEC, because, well quite simply, Bitcoin is not a currency. Consequently, Mr. Shavers argued that it was outside of the SEC’s jurisdiction as Bitcoin investments did not constitute “securities” under federal securities laws.

If the ruling is upheld, the SEC will in fact have jurisdiction. With the advent of Bitcoin and other non-traditional investment vehicles, fraud has popped up almost immediately and should be expected. I mean how many people fell for the “Nigerian Prince” once the internet met Western Union or the eased practice of wire transfers?

Bitcoin criminals

On a personal note, I can’t help but wonder how this will impact my long-standing real estate company that has been offering lots in the more pleasant levels of hell to those who have no question that that is indeed where they are headed when their lives are finished here. My virtual real estate company has been offering affordable options on cul-de-sacs and more temperate levels of hell, with less burning flesh smell, for years. Now I have to worry about the SEC?

I don’t have the space for a full explanation of the crimes Mr. Shavers has been accused of, but strongly suggest that you read this piece by Jordan Maglich of Forbes magazine. Mr. Maglich is an expert on white collar crime and specifically Ponzi schemes.

 

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While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at [email protected]</i>
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