The SEC complaint from 2013 stated;
“From at least September 2011 to September 2012, Shavers, operating under the Internet name “pirateat40,” offered and sold BTCST investments over the Internet, raising more than 700,000 BTC in principal investments from BTCST investors, or more than $4.5 million based on the daily average price of BTC when the BTCST investors purchased their BTCST investments. Shavers falsely promised investors up to 7% interest weekly based on BTCST’s purported BTC market arbitrage activity, including selling BTC to individuals who wished to buy BTC “off the radar,” quickly, or in large quantities. In reality, the BTCST offering was a sham and a Ponzi scheme whereby Shavers used new BTCST investors’ BTC to pay the promised returns on outstanding BTCST investments and misappropriated BTCST investors’ BTC for his personal use.”
