Bitcoin Savings & Trust: Difference between revisions
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'''Bitcoin Savings & Trust''' (abbreviated as '''BST''') was a ponzi scheme operated by [[Trendon Shavers]] (then known as '''Pirate'''). It was launched in November 2011 as '''First Pirate Savings & Trust'''. Pirate claimed to have been selling bitcoins to some local tight-lipped buyers,<ref name="pastebin">[http://pastebin.com/yH0jr6KY Pirate's original post] as archived by | '''Bitcoin Savings & Trust''' (abbreviated as '''BST''') was a ponzi scheme operated by [[Trendon Shavers]] (then known as '''Pirate'''). It was launched in November 2011 as '''First Pirate Savings & Trust'''. Pirate claimed to have been selling bitcoins to some local tight-lipped buyers,<ref name="pastebin">[http://pastebin.com/yH0jr6KY Pirate's original post] as archived by Vitalik Buterin</ref> and that he started BST to provide more volume to these buyers.<ref name="buterin">{{cite web|url=http://bitcoinmagazine.net/the-pirate-saga-and-so-it-ends/|title=The Pirate Saga: And So It Ends|author=Buterin, Vitalik|work=[[Bitcoin Magazine]]|date=30 August 2012|accessdate=1 September 2012}}</ref> By selling invested bitcoins at a high rate and [[Wikipedia:Arbitrage|rebuying them at the market price]], Pirate was supposedly able to offer a very high-yield interest rate of 7% per week.<ref name="pastebin"/><ref name="buterin"/> This rate attracted many investors,<ref name="buterin"/> and Pirate claimed that over 500,000 bitcoins had been deposited.<ref name="buterin"/><ref name="otc">{{cite btct|title=Bitcoin Savings and Trust is closing|date=17 August 2012|id=101339|post=1111794}}</ref> | ||
After accumulating an ever larger amount of bitcoin, transactions were becoming difficult and expensive.<ref name="op">{{cite btct|id=50822|title=Bitcoin Savings and Trust {{!}} Home {{!}} Closed}}</ref> Pirate attempted to reduce the strain by lowering the interest rate, but this sparked unrest and mass withdrawals.<ref name="op"/> After a discussion with his clients, Pirate decided to close BST,<ref name="op"/> and announced his intentions to return all owed bitcoins.<ref name="otc"/><ref name="op"/> After repaying at least 11 small beneficiaries,<ref name="otc"/> BST suddenly announced default on August 28, 2012.<ref>{{cite btct|id=104221|title=Its Official Pirate Has Defaulted!!|date=28 August 2012}}</ref> It was later revealed that the missing money went towards "rent, car-related expenses, utilities, retail purchases, casinos, and meals."<ref>{{cite web|title=Trendon Shavers, Bitcoin Ponzi Schemer, Charged $40 Million Fine|url=http://insidebitcoins.com/news/trendon-shavers-bitcoin-ponzi-schemer-charged-40-million-fine/24716|author=Donnelly, Jacob|date=19 September 2014|accessdate=29 July 2015|work=[[Inside Bitcoins]]}}</ref> | After accumulating an ever larger amount of bitcoin, transactions were becoming difficult and expensive.<ref name="op">{{cite btct|id=50822|title=Bitcoin Savings and Trust {{!}} Home {{!}} Closed}}</ref> Pirate attempted to reduce the strain by lowering the interest rate, but this sparked unrest and mass withdrawals.<ref name="op"/> After a discussion with his clients, Pirate decided to close BST,<ref name="op"/> and announced his intentions to return all owed bitcoins.<ref name="otc"/><ref name="op"/> After repaying at least 11 small beneficiaries,<ref name="otc"/> BST suddenly announced default on August 28, 2012.<ref>{{cite btct|id=104221|title=Its Official Pirate Has Defaulted!!|date=28 August 2012}}</ref> It was later revealed that the missing money went towards "rent, car-related expenses, utilities, retail purchases, casinos, and meals."<ref>{{cite web|title=Trendon Shavers, Bitcoin Ponzi Schemer, Charged $40 Million Fine|url=http://insidebitcoins.com/news/trendon-shavers-bitcoin-ponzi-schemer-charged-40-million-fine/24716|author=Donnelly, Jacob|date=19 September 2014|accessdate=29 July 2015|work=[[Inside Bitcoins]]}}</ref> | ||
Latest revision as of 20:45, 2 June 2020
Bitcoin Savings & Trust (abbreviated as BST) was a ponzi scheme operated by Trendon Shavers (then known as Pirate). It was launched in November 2011 as First Pirate Savings & Trust. Pirate claimed to have been selling bitcoins to some local tight-lipped buyers,[1] and that he started BST to provide more volume to these buyers.[2] By selling invested bitcoins at a high rate and rebuying them at the market price, Pirate was supposedly able to offer a very high-yield interest rate of 7% per week.[1][2] This rate attracted many investors,[2] and Pirate claimed that over 500,000 bitcoins had been deposited.[2][3]
After accumulating an ever larger amount of bitcoin, transactions were becoming difficult and expensive.[4] Pirate attempted to reduce the strain by lowering the interest rate, but this sparked unrest and mass withdrawals.[4] After a discussion with his clients, Pirate decided to close BST,[4] and announced his intentions to return all owed bitcoins.[3][4] After repaying at least 11 small beneficiaries,[3] BST suddenly announced default on August 28, 2012.[5] It was later revealed that the missing money went towards "rent, car-related expenses, utilities, retail purchases, casinos, and meals."[6]
References
- ↑ 1.0 1.1 Pirate's original post as archived by Vitalik Buterin
- ↑ 2.0 2.1 2.2 2.3 Buterin, Vitalik (30 August 2012). "The Pirate Saga: And So It Ends". Bitcoin Magazine. http://bitcoinmagazine.net/the-pirate-saga-and-so-it-ends/. Retrieved 1 September 2012.
- ↑ 3.0 3.1 3.2 BitcoinTalk thread 101339. Bitcoin Savings and Trust is closing 17 August 2012. Post 1111794.
- ↑ 4.0 4.1 4.2 4.3 BitcoinTalk thread 50822. Bitcoin Savings and Trust | Home | Closed n.d.
- ↑ BitcoinTalk thread 104221. Its Official Pirate Has Defaulted!! 28 August 2012.
- ↑ Donnelly, Jacob (19 September 2014). "Trendon Shavers, Bitcoin Ponzi Schemer, Charged $40 Million Fine". Inside Bitcoins. http://insidebitcoins.com/news/trendon-shavers-bitcoin-ponzi-schemer-charged-40-million-fine/24716. Retrieved 29 July 2015.