Secretary of state warns of virtual currency scheme

Missouri Secretary of State Jason Kander today issued a warning about a fraud scheme involving virtual currency.

Kander's investor alert follows allegations by the U.S. Securities and Exchange Commission that a Texas man committed fraud utilizing Bitcoin, a virtual currency relying on cryptography, according to a news release.

The SEC alleges Trendon Shavers of Texas defrauded investors by promising them as much as 7 percent interest per week on trades conducted via Bitcoin. Through the scheme, the SEC claims Shavers defrauded investors from several states of more than $4.5 million. Bitcoin, itself, is not accused of wrongdoing.

“All investments carry some degree of risk. Don’t let the guise of virtual currency or the supposed guarantee of high returns lead you into a Ponzi scheme," Kander said in the release. "Investment offers involving virtual currency should be subjected to thorough scrutiny, including an understanding of how the investment makes money."