Bitcoin Savings & Trust

From Bitcoin Wiki
Jump to: navigation, search

Bitcoin Savings & Trust (abbreviated as BST) was a ponzi scheme operated by Trendon Shavers (then known as Pirate). It was launched in November 2011 as First Pirate Savings & Trust. Pirate claimed to have been selling bitcoins to some local tight-lipped buyers,[1] and that he started BST to provide more volume to these buyers.[2] By selling invested bitcoins at a high rate and rebuying them at the market price, Pirate was supposedly able to offer a very high-yield interest rate of 7% per week.[1][2] This rate attracted many investors,[2] and Pirate claimed that over 500,000 bitcoins had been deposited.[2][3]

After accumulating an ever larger amount of bitcoin, transactions were becoming difficult and expensive.[4] Pirate attempted to reduce the strain by lowering the interest rate, but this sparked unrest and mass withdrawals.[4] After a discussion with his clients, Pirate decided to close BST,[4] and announced his intentions to return all owed bitcoins.[3][4] After repaying at least 11 small beneficiaries,[3] BST suddenly announced default on August 28, 2012.[5] It was later revealed that the missing money went towards "rent, car-related expenses, utilities, retail purchases, casinos, and meals."[6]