Bitcoin Savings & Trust
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.