Bitcoin community reacts after SEC brings down hammer on Voorhees

On Tuesday, the Securities and Exchange Commission (SEC) charged Erik Voorhees, co-owner of two Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term-related websites for offering shares in them without registration with the Commission.

One of the sites is SatoshiDice, a website that allows for gambling based off of the Bitcoin protocol. The other is FeedZeBirds, which pays Twitter users bitcoins for forwarding sponsored content.

Voorhees was fined a total of over $50,000, comprised of a disgorgement of $15,843.98 for his profits plus a $35,000 penalty. Voorhees neither confirmed nor denied the allegations and settled upon these charges with the SEC.

The Bitcoin community has come out firing against the SEC and to a large extent, rallying behind Voorhees. Debate also broke out as to how much we can compare this case with HSBC, who was fined $1.9 billion for poor money laundering controls in 2012.

Voorhees himself took to reddit to post what was obviously a restrained reaction:

Fellow Bitcoiners- As you may have seen, it was announced today that I have entered into a settlement agreement with the SEC. With this matter resolved, I look forward to helping to build the Bitcoin industry and the future of finance. For further comment, please contact my attorney: Brian Klein Baker Marquart LLP Email: bklein@bakermarquart.com In liberty, -Erik Voorhees

One takes note that there are a myriad of Bitcoin-related "securities" listed on sites like Havelock Investments and MPEx. The SEC has not taken action, although some speculate that they're not yet done.

Mircea Popescu, who operates the MPEx exchange where SatoshiDice shares were once listed, was contacted by by Daphna A. Waxman in March regarding the investigation. In the SEC's announcement, she is listed as one of the investigators. Popescu forcefully and mockingly refused to cooperate. He ridiculed hers and the SEC's credentials for the inquiry and posted their correspondence online.

Tuesday's charges mark the second incidence of the SEC coming down on Bitcoin. Last year, the SEC charged Trendon T. Shavers for running a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term. He reportedly ran BTCST, which offered bitcoin-denominated investments over the web claiming to return 7% a week.