Bitcoin Savings and Loan Founder Could be Going Back to Prison

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  • The founder of the first Bitcoin Ponzi scheme, Bitcoin Savings & Loan, could be heading back to prison
  • Brendan Shavers served two years in prison for operating the scam and owed the SEC $40 million
  • He has never paid the fine, and a judge has sent him back to prison as a result

The founder of the first Bitcoin scam, Bitcoin Savings & Loan, could be back behind bars after failing to pay back $40 million as part of his plea deal in 2015. Trendon Shavers, who operated Bitcoin Savings & Loan between 2011 and August 2012, pleaded guilty in September 2015 to one count of securities fraud, but since the sentence was imposed he has avoided paying the fine, with a judge deciding that the only way to get him to pay up was the threat of jail.

Bitcoin Saving & Loan Took in 764,000 Bitcoin

Shavers began Bitcoin Savings and Loan after similar smaller experiments, offering between 1-3.5% interest per day to anyone who deposited their bitcoin, with Shavers buying fresh bitcoin and sending it back, with the interest.

Bitcoin Savings & Loan was very successful, raising some 764,000 bitcoin from around 100 investors, worth roughly $5 million at the time, with the SEC alleging that he spent a portion of this on “rent, car-related expenses, utilities, retail purchases, visits to casinos, and meals” for himself.

Shavers Has Shown “Flagrant Disregard”

Texas resident Shavers was hit with a $40 million fine as part of his plea deal, but according to Judge Mazzant he has shown “flagrant disregard for the court’s orders on multiple occasions” which has led to one conclusion – “Shavers will only comply with the court’s orders if he is incarcerated.”

The judge also noted that Shavers failed to appear for a hearing on the matter, and reiterated that other than imprisonment he saw “no other way to coerce Shavers to comply” with court orders. This means that Shavers will likely head back to prison for the first time since his release in 2017.