Bitcoin 2014 // 15-17 May // Amsterdam Register

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Response to SEC charges against Ponzi scheme operator

Patrick Murck    Jul 24 2013

The Bitcoin Foundation today learned that the SEC has charged Mr. Trendon Shavers (aka “pirateat40″) with operating a Ponzi scheme and fraudulently offering and selling unregistered bitcoin-denominated securities. While the SEC made it clear that Bitcoin itself is not a Ponzi scheme, Mr. Shavers is alleged to have preyed upon members of the bitcoin community.

This should serve as a reminder to entrepreneurs that the use of bitcoin is not a panacea for operating a legal and regulatory compliant business. It should also serve to remind consumers that they should be wary of “too good to be true” schemes, regardless of how they are denominated.

Compliant with SEC rules or not, Mr. Shaver’s offering, as alleged, was wrong and harmful to the bitcoin community. We all want to have a safe and fair economy and the bitcoin community has made great strides towards this goal since Mr. Shaver’s operation went out of business last year. All entrepreneurs owe it to their community to be responsible stewards and fair actors.

The Foundation shall continue to promote and support a fair, safe and free bitcoin economy. To that end we will continue to educate regulators and law enforcement both in the United States and internationally on the bitcoin economy and decentralized and participatory currency and financial systems.