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Texas Man Arrested for $4.5M Bitcoin Ponzi Scheme
- DrFunke 12y agoShould've tried Kickstarter instead.
- wmf 12y agoI assume that's a joke, but there's a lot of shady crowdfunding, "crowdsales", IPOs, and "ICOs" going on in Bitcoin land. They're not Ponzis because they don't promise any specific level of return but the effect is similar and the SEC is cracking down on some of them.
- thret 12y ago4.5 million bitcoin scheme, 40 million in fines? Ridiculous. According to the article he took around 1 million for personal use and returned the rest.
- skywhopper 12y agoIf you only had to pay back what you stole, it wouldn't really be punishment.
- 4ad 12y agoAnd it has to be punishment, instead of, say, rehabilitation, because?
- Already__Taken 12y agoSo you don't scam twice as big and just get caught for half of it on purpose. Pretty sure that's Die Hard though.
- valvar 12y agoBecause retributive theory of punishment.
- mikeash 12y agoHow do you rehabilitate a person who does something like this such that they won't do it again? Serious question.
- growupkids 12y agoDeterrent.
- jfoster 12y agoWell, possibly it could be rehabilitation, but what if rehabilitation fails and they offend again? Do you just layer on more rehabilitation each time, or do you eventually decide on punishment at some point?
- MarkMc 12y agoJustice
- personZ 12y agoBecause there are a thousand other people saying "oooh, what a good scheme. Maybe I should try that." Deterrence is a significant part of the justice system.
- tptacek 12y agoBecause otherwise it would be irrational not to commit crimes?
- mikeyouse 12y agoHe kept 150,000 Bitcoin.. Today they'd be worth over $50M. If you stole a stack of stock certificates on a day when they were only worth $10 and were arrested on a day when they were worth $100, you couldn't just pay back $10 in cash and walk away with the stock, why should BTC be any different?
- Dylan16807 12y agoFailure to repay is subtly different from going out and stealing in the traditional manner. If you fail to repay stock and get super lucky with the value I think you should be able to pay cash+interest+penalties* and walk away. (And play roulette next time, less likely to end in jail.) They're not going to demand less money if the stock goes down, are they? *penalties perhaps meaning you pay $30 plus interest
- lifeformed 12y agoWhat if they were now worth $0? Should he not have to pay then?
- rbobby 12y ago11% per _week_! If it sounds too good...
- mikeash 12y agoIf it sounds too good to be true, then you'd better put all your savings into it quick before it gets shut down?
- swartkrans 12y agoYou're liable for clawbacks. Madoff investors who pulled out early and received more than they should have at the expense of others were all sued by the trust responsible for recompensing victims. Best to just stay out of it.
- mikeash 12y agoWow, I had no idea. I was joking, but that's interesting just the same.
- MichaelApproved 12y agoDoes anyone know more about this story? Could he have gotten away with this if he were in a country with less regulations? Was part of the pitch that he was from the US or was that irrelevant to his investors?
- justincormack 12y agoYou can rarely get away with Ponzi schemes. For an example of a less regulated country, check out the Albanian schemes [1] which reached 50% of GDP and then led to rioting, civil war, the fall of the government. [1] http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm
- ddorian43 12y agoBut they ~got away with it.
- pdq 12y agoHere's the entire historical thread from pirateat40 on bitcointalk.org. Note the first post was updated later on to indicate he closed it, but the rest of the thread is archived. https://bitcointalk.org/index.php?topic=50822.0 https://bitcointalk.org/index.php?topic=50822.0
- consz 12y agoI remember seeing pirateat40's scam happening live. I could not believe that anyone could possibly fall for a fund offering 10%+ per week, and when I found out that he ran off with 150k bit coins, I laughed so hard. The bitcoin community always found ways to amaze me.
- lotsofmangos 12y agoTo think, that it has come to pass that you can't trust an investment scheme in an unregulated currency by someone who calls themselves a pirate.
- beaner 12y agoWhat's really hilarious is that not only did the vast majority of the bitcoin community not get scammed, but you don't have to be a bitcoin user to be ponzi-scheme'd, since it happens to people everywhere all the time! It's so funny.
- jrockway 12y agoI'm hoping for more of these Internet crimes, if only because the transcription of Twitter posts into official court documents amuses me. Or is that "#amusesme"?
- alttab 12y agoits called #seeyouindeposition
- wpietri 12y agoI am shocked! Shocked that an unregulated asset class that has attracted every technoutopian, financial naïf, and get-rich-quick dreamer would have a Ponzi scheme in the community. Every once in a while something happens where possibly some of the old rules don't apply; suddenly a lot of people believe that none of the old rules are of any use at all. E.g., the dot-com bubble, when the new economy changed everything! Until it all came crashing down.
- jgoewert 12y agoWith ponzi schemes, I always have wondered if they "work" because some people even see that they are ponzi schemes, but believe themselves to be part of the early investor set that will receive they promised shares and "outsmart" the person leading the scheme.