RECOMMENDED READING: Jordan Maglich In Forbes On Green-Lighting Of SEC Lawsuit In Alleged Ponzi Scheme Involving Bitcoin — And Why Zeekers Should Pay Attention

recommendedreading1A federal judge in Texas has ruled that investments in the alleged Bitcoin Savings and Trust HYIP Ponzi scheme met all three prongs of the Howey Test and constituted an “investment contract” under federal securities laws.

The ruling by U.S. Magistrate Judge Amos L. Mazzant of the Eastern District of Texas means that a lawsuit filed last month by the SEC against Trendon T. Shavers of McKinney will proceed. Shavers challenged the jurisdiction of the court, asserting that BTCST investments were not securities because Bitcoin is not money and is not part of anything regulated by the United States. He further contended that his transactions were were all Bitcoin transactions and that no money ever exchanged hands.

For its part, the SEC argued that the BTCST offerings were both investment contracts and notes, and, thus, securities. Among other things, the SEC alleged that Shavers promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin ‘off the radar’ in quick fashion or large quantities.  In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments.”

Read Maglich’s dissection of the ruling and the ramifications at Forbes.

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One Response to “RECOMMENDED READING: Jordan Maglich In Forbes On Green-Lighting Of SEC Lawsuit In Alleged Ponzi Scheme Involving Bitcoin — And Why Zeekers Should Pay Attention”

  1. Always nice when the crooks get caught…..

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