US SEC charges Texas man with running Bitcoin Ponzi scheme

WASHINGTON (REUTERS) - US securities regulators on Tuesday charged a Texas man with running a Ponzi scheme by offering Bitcoin virtual currency investments over the Internet and pocketing some of the proceeds for personal expenses.

The US Securities and Exchange Commission alleged that Trendon Shavers, the founder of Bitcoin Savings and Trust, falsely promised investors up to 7 per cent in weekly interest, but instead used much of the funds from new investors to cover withdrawals by other investors.

Separately, the SEC also warned investors against the dangers of potential scams involving virtual currencies like Bitcoin.