Nov. 6 (Bloomberg) -- Trendon Shavers, founder of Bitcoin Savings and Trust, was charged with fraud and accused of masterminding a $4.5 million Ponzi scheme, according to federal prosecutors in Manhattan who said it was the first U.S. securities-fraud prosecution tied to the electronic currency.

Shavers, 32, who operated the firm that made virtual currency-based investments through the Internet, raised at least 764,000 bitcoins through his business, Manhattan U.S. Attorney Preet Bharara said in a statement. At the peak of the scheme, Shavers raised and had in his possession about 7 percent of all the bitcoins in public circulation, Bharara said.

From September 2011 through September 2012, Shavers, using the name “pirateat40,” solicited investments in Bitcoin Savings on Bitcoin Forum, an Internet site where investment opportunities are posted, the U.S. alleged.

“Trendon Shavers managed to combine financial and cyber fraud into a bitcoin Ponzi scheme that offered absurdly high interest payments and ultimately cheated his investors out of their bitcoin investments,” Bharara said in a statement. “This case, the first of its kind, should serve as a warning to those looking to make a quick buck with unsecured currency.”

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