Matt Levine, Columnist

Illegal Bitcoin IPO Actually Worked Out Pretty Well for Investors

If you are scammed out of bitcoins, should you be able to get your bitcoins back, or just their dollar value at the time? Or nothing, because, come on, don't get scammed out of bitcoins.

June 3, 2014 at 5:57 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Today the Securities and Exchange Commission shut down a bitcoin investing scam that, as bitcoin investing scams go, is disappointingly un-scammy. A very bitcoiny guy named Erik Voorhees1 started some very bitcoiny companies called SatoshiDICE and FeedZeBirds,2 and he sold shares in those companies, for bitcoins, over the internet. He called these sales initial public offerings, and published homemade prospectuses for them on the Internet,3 but he forgot to register them with the SEC.

The SEC does not like it when you do that. Today it made him disgorge $15,000 in profits and pay a $35,000 fine.