SEC Sues Virtual Bank Founder Over $4.5M Bitcoin Scam

Law360, Los Angeles (July 23, 2013, 3:52 PM EDT) -- The U.S. Securities and Exchange Commission launched a lawsuit in Texas federal court on Tuesday against the founder of Bitcoin Savings and Trust, saying the man and his company defrauded investors in a Ponzi scheme involving bitcoin, a virtual currency traded online.

The SEC's complaint raises allegations that BTCST founder Trendon T. Shavers offered and sold bitcoin-denominated investments through the Internet and raised least 700,000 bitcoin, which the SEC says amounted to more than $4.5 million based on the average price of bitcoin in 2011 and 2012, when the investments were offered and sold. The SEC says BTCST was a sham...

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