Real Ponzi Scheme Possible With Fake Money

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Inevitably, somebody was going to run a Ponzi scheme with bitcoins, and so it has (allegedly!) come to pass: Trendon Shavers of exurban Dallas won the race to be hit with the first such criminal charges, although some of the element of surprise went out of it when the SEC fined him $40 million for the same thing two months ago.

But Shavers was not content merely to enjoy the proceeds of said (alleged) Ponzi scheme. As old friend Matt points out over at Bloomberg View, in a feat of confidence worthy of Bernie Madoff, he actually bet someone 5,000 bitcoins that his enterprise was not a Ponzi scheme. But do not say Shavers is without honor; say he is without intelligence: Much to his lawyers’ current chagrin, he (allegedly) ‘fessed up that it was, in fact, a Ponzi scheme, and made good on the bet.

In or about early July 2012, SHAVERS and another participant on the Bitcoin Forum ("Individual-2") made a bet as to whether BCS&T was a Ponzi scheme….

On or about August 30, 2012, Individual-1 declared Individual-2 the winner of the bet, and wrote:

I hereby declare the bet decided, in favor of [Individual-2] . A withdrawal request made on August 15[,] 2012, is still outstanding as of today, Aug[ust] 30[,] 2012, which triggers default as specified in the contract, via "late by at least 14 calendar days, in disbursing either any regularly-scheduled interest payment, or any withdrawal request, by a valid account holder of [BCS&T]" clause.

In private communication, pirateat40 undefined has agreed with this assessment and conceded the bet.

Bitcoin Ponzi Schemer Lost a Bet [BloombergView/Matt]
Texas Man Charged With Running Bitcoin Ponzi Scheme [WSJ]
Earlier: If A Bitcoin Isn’t Really Money, Can You Commit Fraud With It?

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