McKinney Man Charged With Running A Bitcoin Ponzi Scheme | KERA News

McKinney Man Charged With Running A Bitcoin Ponzi Scheme

Nov 7, 2014

Five stories that have North Texas talking: crackdown on an alleged Bitcoin Ponzi scheme, today is the last day of monitoring for any North Texan with possible exposure to Ebola, the President rings up governor-elect Greg Abbott, and more.

A McKinney man has been arrested and charged with running a Bitcoin Ponzi scheme. Trendon Shavers, also known as “pireateat40,” was taken into custody yesterday on charges of securities fraud and wire fraud. The Dallas Morning News reports that the U.S. Securities and Exchange commission has filed civil complaints against Shavers, 32, twice over his Bitcoin Savings and Trust, which it says cheated investors out of at least 764,000 Bitcoin or $4.5 million.

Prosecutors say this is a “first of its kind” securities fraud case, because Bitcoin is a virtual currency and isn’t regulated. Pablo Arauz Pena explains how Bitcoin works:

Bitcoin works almost like real money or fiat currency -- but instead of a physical bank note, you have a specific string of numbers. The numbers are "mined," with data miners use computers with specialized software to solve algorithms or complex math problems to eventually find a coin.

Sound confusing? It is. But the thing about Bitcoin is there's a cap to how many are made.

Currently, about 25 Bitcoins are released every 10 minutes. Right now, there are over 12 million minted Bitcoins in circulation. The last coin is to be made in 2140.

Shavers had 7 percent of all Bitcoin in circulation in his possession at the time of his scheme. He can face up to 40 years behind bars and more than $5 million in fines if he’s found guilty on both charges.

  • Texas health officials and many North Texans will breathe a sigh of relief. The last person who had contact any of the three Dallas Ebola patients will be cleared from twice-daily monitoring today. In all, a total of 177 people have been monitored for the virus in North Texas. Those people either were in contact with the three Ebola patients or handled specimens or medical waste. No additional cases of Ebola have been diagnosed in Texas. Texas health commissioner David Lakey spoke to KERA about the lessons learned from the scare.
  • President Barack Obama gave Governor-elect Greg Abbott a congratulatory phone call. The Associated Press reports the president called Abbott Wednesday night to congratulate him on his win. Abbott spokesman Matt Hirsch said the phone call was brief and cordial, and Abbott thanked Obama for the call. He also told the president he would work to find solutions for important issues facing Texas. As attorney general, Abbott has sued Obama’s administration 30 times.
  • TCU football fans are gearing up for an exciting game this weekend. TCU’s football team is third in the Big 12 conference, and face Kansas State tomorrow in a playoff game at Fort Worth’s Amon G. Carter Stadium. The Fort Worth Star-Telegram reports on the local fervor surrounding the game.
  • The Amon Carter Museum of American Art has a show focusing on George Caleb Bingham, who painted romantic scenes of life on the Missouri River. The museum decided to add a modern take and commissioned Chicago photographer Terry Evans to capture life on The Trinity River. Evans spoke with KERA’s Anne Bothwell about her exhibition, “Meet Me At The Trinity.”