A Texas man was ordered on Friday to pay $40.4 million after he was convicted of conducting a massive Bitcoin-centric Ponzi scheme.
Trendon T. Shavers operated a phony Bitcoin investment firm, The Bitcoin Savings and Trust (BTCST), from February 2011 through August 2012, according to court documents. Shavers lured in Bitcoin investors by saying they could invest their currency in BTCST for a profitable return. They were promised seven percent weekly interest.
In reality, Shavers pocketed approximately 180,819 Bitcoins, or more than $101 million. Investors collectively lost 265,678 Bitcoins, or more than $149 million.
A judge wrote that under these circumstances, “maximum, third-tier civil penalties against each of the Defendants are appropriate and necessary to persuade them not to engage in such conduct again.”