Trendon Shavers has reached a plea deal with prosecutors in bitcoin ponzi schemebr>
Trendon Shavers, accused of running a multimillion dollar bitcoin ponzi scheme, has reached a plea deal with prosecutors.
Shavers, of McKinney, Texas, pleaded guilty to running a bitcoin Ponzi scheme, in what has been described as the first securities fraud case surrounding the digital currency. The scam once controlled over seven percent of the bitcoin in circulation.
According to prosecutors, he in fact used new investor money to back prior investors. Some funds were allegedly invested on MtGox, at one point the world’s largest bitcoin exchange, which collapsed in February 2014. He also allegedly spent funds on lavish personal items. 48 investors reportedly suffered losses.
“I know what I did was wrong and am very sorry,” Shavers reportedly said in a court hearing.
Prosecutors said it was the first criminal fraud case involving digital currency.
According to the plea deal, Shavers would plead guilty to one count of securities fraud. He will be sentenced to between 33 and 41 months in prison, provided that he does not appeal. He will also pay a $5 million fine.