Revival of Billion-Dollar Bitcoin Case Hailed As Win For Whistleblowers By FTI Law

·2 min read

NEW YORK, January 25, 2022--(BUSINESS WIRE)--FTI Law, New York’s premier whistleblower law firm, hailed the revival of a billion-dollar Ponzi scheme case as a "win for whistleblowers." In a 2013 landmark action, Texas man Trendon Shavers was convicted of what a Texas federal court called a "sham and a Ponzi scheme." Shavers, who went by the alias "Pirateat40," convinced investors to send him over 700,000 Bitcoin, a sum worth over $20 billion today. Shavers was ordered to pay $40 million in penalties but the missing Bitcoin was never fully recovered. Seven years since the case was closed, it sprung to life in recent weeks when the Securities and Exchange Commission (SEC) made a flurry of filings and a District Court in Texas ordered Shavers to turn over his Coinbase account to the SEC. The filings reveal that Shavers never paid any of his $40 million fine, but that the SEC claims to have new information on his ability to pay.

"The revival of the case is a win for victims and any whistleblowers involved in the case," said New York whistleblower attorney John Joy, founder of FTI Law. "The filings show that Shavers never paid any of the original fine and that hundreds of thousands of Bitcoin are still unaccounted for. The latest filings give hope that some of these funds can be recovered, which could lead to recovery for victims and rewards for whistleblowers."

"For those in the crypto industry, the case is infamous," explained Max Galka, CEO of Elementus, the first universal blockchain search engine. "Not only were there significant amounts of Bitcoin involved, but the case gives a rare insight into the early days of the Bitcoin community."

Transcripts from the 2013 action tell of steak dinners in Vegas, online rivalries and anonymous betrayals. The case continues to intrigue with the latest filings showing the SEC intends to call Shavers’ wife to appear as a witness against him.

The case is SEC v. Shavers (4:13-cv-00416) E.D. Texas. For updates, sign up to follow FTI Law’s coverage here.

FTI Law is a New York whistleblower law firm that specializes in securities fraud, whistleblower awards and cryptocurrency.

Elementus is the first "Who’s Who" of crypto entities on the blockchain and institutional-grade crypto analytics solution.

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Contacts

For inquiries contact John Joy, FTI Law: 212-220-9760