Bitcoin News: $60M Bitcoin Ponzi Scheme, FaceBook

A fool and his #bitcoin are soon parted.

Media outlets are buzzing with the news, that a Man nicknamed ‘The Pirate’, ran a Bitcoin Ponzi Scheme. The Texas man and his company was charged by the SEC with defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online. The currency is part of a worldwide, disruptive, open-source project hosted online. BitCoins have been growing in popularity worldwide. Various investment schemes promoted on the popular Bitcoin Forum over the years have been viewed with suspicion, and this latest episode will only ensure greater scrutiny.

The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.”  Shavers raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold.  Today the value of 700,000 Bitcoin exceeds $60 million.

The SEC issued an investor alert warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet. 

“Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “Shavers preyed on investors in an online forum by claiming his investments carried no risk and huge profits for them while his true intentions were rooted in nothing more than personal greed.”

CrowdFunding in Facebook with BitCoin ?

Facebook users can now accept BitCoin as a donation using SocialPrepper’s new Facebook app ‘BitCoin’.  All you need to do is submit your organization’s name, bitcoin address and a brief description of the organization within the app. The app will generate a qrcode of the bitcoin address, then just post the submission to Facebook. Users can also accept BitCoin as a donation using the Facebook App ‘BitCoin’. 

Users can scan the qrcode send BTC ( BitCoin) to an organization. The wall post of course can be shared to other friends to increase crowd donations. Users can also access the btc address of the organization listed in the directory if the organization chooses for the btc address to be public listed.

A growing list of merchants that accept btc is also available in the app BitCoin. Purchasing FaceBook credits with btc or giftcards to participating merchants with the app’s new partnership with Gyft. Participate in game of strategy with ‘BitCoin’ mining for Btc while logged into Facebook and the btc mining page is open.The bitcoin earned can be used to obtain Facebook credits through their partnership with Gyft. The app ‘BitCoin’ is listed in the app store.

The first release of the android version of the app is now in the store. The Droid app runs within the droid version of FaceBook.

Avalon Clones – Secures $3 Million in Second Round of Private Venture Funding

Avalon Clones is a Bitcoin mining hardware and computer company that provides solutions to Bitcoin miners on an international level. Avalon Clones announced today that it has secured an additional $3 million in a second round of financing. Avalon Clones secured an initial round of $1.5 million in seed funding earlier in the year. The initial funding allowed the company to establish itself and achieve its initial objective of reverse engineering Avalon Batch 1 PCB boards and begin taking system pre-orders. With the company working to fill initial pre-orders, this second round of funding opens up the doors for faster delivery times and development of proprietary hardware on both 110nm and 28nm chipsets. 

“Bitcoin is a triple entry bookkeeping system where a public ledger of every Bitcoin transaction is validated and distributed in real-time through the peer-to-peer Bitcoin network,” says “Bitcoin mining is the mechanism that keeps everyone in the system synchronized together. Bitcoin miners perform this labor because miners that solve a block earn (1) any transaction fees paid by customers for faster transaction processing and (2) newly created coins.