06 Nov 2014

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One arrested in first Bitcoin fraud case

New York — A New York prosecutor says the federal government has brought its first Bitcoin securities fraud case, accusing a 32-year-old Texas man of engineering a Bitcoin Ponzi scheme.

US Attorney Preet Bharara announced the arrest on Thursday of Trendon Shavers.

He is awaiting a court appearance in Texas on charges of securities fraud and wire fraud.

Authorities say Shavers has already been ordered by a federal court in Texas to give up more than $40m and pay a $150 000 penalty in a related civil case.

Bharara says Shavers caused about half of 100 investors to lose all or part of their bitcoin investment in 2011 and 2012.

It isn't clear who will represent Shavers in court. Shavers did not immediately respond to a message for comment.

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