Bitcoin Savings and Trust Hack

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, and that he started BST to provide more volume to these buyers. 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. This rate attracted many investors, and Pirate claimed that over 500,000 bitcoins had been deposited.

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