Bitcoin Ponzi scheme perpetrator Trendon Shavers has plead guilty to securities fraud, a decision that reverses plea of not guilty submitted in March.
Shavers faced up to 20 years in prison for defrauding investors out of an estimated $4.5m while operating Bitcoin Savings & Trust (BS&T). The investment scheme, which promised investors 7% returns on bitcoin market arbitrage activity in 2011 and 2012, became the object of a US Securities and Exchange Commission (SEC) inquiry in July 2013.
According to a report by Bloomberg, Shavers will now serve anywhere from 33 months to 41 months in prison as a result of the plea deal, and pay a $5m fine.
“I know what I did was wrong and am very sorry,” Shavers said in a court hearing, according to the news source.
Shavers was ultimately found to be engaging in a Ponzi scheme whereby money from new investors was used to issue "interest payments" to new investors. Further, he exchanged bitcoin into US dollars to pay personal expenses, investigators found.
As a result of an initial inquiry, Shavers was forced to pay $40m in penalties for violating anti-fraud and securities laws in September of 2014. He was subsequently arrested again on criminal charges in November of that year.
A 9th September filing in the case previously revealed that US Attorney Preet Bharara had postponed a pre-trial conference on the basis the parties were working toward an agreement.
Shavers is scheduled to be sentenced on 3rd February, 2016.
For more information, a full copy of the plea agreement can be found below.
Justice image via Shutterstock.