Barely Legally

Confessions of a Moot Court Bailiff

Bitcoin Pyramid Scheme Collapses

From The Verge comes a tale as old as imaginary digital currency itself:

Remember pirateat40, the e-currency banker we speculated could be the Bernie Madoff of Bitcoin? Well, it looks like he owes a lot of people money. On August 17, pirateat40 announced the closure of Bitcoin Savings & Trust, a virtual hedge fund that promised to pay high rewards to investors who parked their Bitcoins there. Ten days later, investors are still waiting to get paid and pirateat40 is on the defensive. “When I know, you will,” says his away message in the fund’s official chat room, an effort to quiet the loudening chorus of, “WHERE ARE MY BITCOINS?”

What? The guy who promised interest rates of 350% per year was running a colossal ($5.6 million!) pyramid scheme? No way. That has to be legit.

Actually, I would say that someone running a pyramid scheme with Bitcoin probably does as much to legitimize the currency as anything else.