BST Ponzi Scheme Raises Entry MinimumPirateat40's Bitcoin Savings & Trust Gains Momentum
Trendon Shavers (Pirateat40) raises the minimum investment for his Ponzi scheme to 100 BTC, signaling massive growth.
On February 9, 2012, Trendon Shavers, operating under the pseudonym 'Pirateat40,' announced on the BitcoinTalk forum that the minimum deposit for his Bitcoin Savings & Trust (BST) was increasing to 100 BTC. This adjustment was a clear indicator of the explosive, albeit fraudulent, growth of the scheme, which had been soliciting funds since late 2011. Shavers promised investors unrealistic weekly returns of up to 7%, claiming he generated these profits through 'arbitrage' and 'local lending' activities that were never substantiated.
The hike to a 100 BTC minimum (worth roughly $500–$600 at the time) was a classic tactic used to project exclusivity and success, effectively filtering for wealthier 'investors' while reducing the administrative burden of small accounts. At its peak, Shavers controlled approximately 7% of the entire circulating Bitcoin supply (over 700,000 BTC passed through the scheme), a level of centralization that posed a theoretical threat to the market's stability. The scheme's popularity revealed the extreme naivety of the early Bitcoin market; despite the mathematical impossibility of the promised returns, high-profile community members defended 'Pirate' based solely on his forum reputation and timely payouts.
This period represented the 'high water mark' for High Yield Investment Programs (HYIPs) in the cryptocurrency space. The eventual collapse of BST later in 2012 would serve as a brutal lesson in counterparty risk and lead to the first federal securities fraud charges involving Bitcoin, establishing the precedent that U.S. securities laws applied to digital assets.