Its rare to be able to describe any incident of securities or financial fraud as a positive. But that’s exactly the case with yesterday’s indictment of alleged bitcoin Ponzi scheme operator Trendon T. Shavers of McKinney, Texas. Due to bitcoin’s perceived anonymity and the opacity of its markets, the cryptocurrency has long induced a fear in financial regulators. But the fact that the Securities and Exchange Commission (SEC) was able to gather enough evidence for an indictment should be viewed as a positive sign for broad adoption of bitcoin in the future.

There is limited information available today as to what evidence the SEC was able to gather against Shavers, and how. But the federal government doesn’t hand out indictments haphazardly, despite what some conspiracy theorists may say, and the SEC procured specific figures on the intake and outflows from Shavers’ Bitcoin Savings and Trust (BTCST).

According to a press release issued by the Commission:

Shavers raised at least 700,000 bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold. Today the value of 700,000 Bitcoin exceeds $60 million. [Shavers] paid 507,148 Bitcoin in investor withdrawals and purported interest payments. He transferred at least 150,649 Bitcoin to his personal account at an online Bitcoin currency exchange. Shavers suffered a net loss from his day trading, but realized net proceeds of $164,758 from his sales of 86,202 Bitcoin. Shavers transferred $147,102 from his personal account at the online Bitcoin currency exchange to accounts he controlled at an online payment processor as well as his personal checking account.

From the above, it appears that financial crimes at the scale that would threaten public safety, let alone the solvency of state issued fiat currency, is unlikely to go unnoticed, regardless of the use of virtual currencies like bitcoin.

Beyond the fraudulent transfers alleged above, all the classic warning signs of a Ponzi scheme were apparent in the Shavers case. The purported fraudster “promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity,” and told current and potential investors, “I have yet to come close to taking a loss on any deal,” and “risk is almost 0.” The Commission added that Shavers sold BTCST investments over the Internet through illegal “general solicitations” to investors in states including Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania.

As SEC Director of the Office of Investor Education and Advocacy Lori J. Schock warned in yesterday’s release, “Ponzi scheme operators often claim to have a tie to a new and emerging technology as a lure to potential victims. Investors should understand that regardless of the type of investment, a promise of high returns with little or no risk is a classic warning sign of fraud.”

Again, bitcoin has taken on an boogeyman-esque quality in the mind of financial conservatives wary of the potential for fraud, money laundering, tax evasion, and all manner of other crimes. But Shavers’s alleged Ponzi scheme activity had little to do with the fact that his investment offering was denominated in bitcoin -- other than the novelty it likely added to his sales pitch. The term Ponzi Scheme was coined in 1920, named after Charles Ponzi, a particularly notorious swindler, but the fraudulent investment model has been around far longer, involving a variety of traditional and exotic financial products.

More importantly to the bitcoin ecosystem, the fact that Shavers operated in bitcoin did not prevent the SEC from gathering sufficient evidence to indict. Per Andrew M. Calamari, Director of the SEC’s New York Regional Office, “Fraudsters are not beyond the reach of the SEC, just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws.”

This is not the first legal action against bad actors in the virtual currency ecosystem. Liberty Dollar creator Bernard von Nothaus was found guilty of illegally creating a private coin or currency systems to compete with the official coinage and currency of the United States. US federal and state agencies have also frozen the accounts of Mt. Gox, the world’s largest bitcoin exchange, and similarly sent a cease and desist order to the Bitcoin Foundation, a non-profit industry association.

There is a great deal of optimism around the prospects of bitcoin and other virtual currencies to positively affect the future portability of capital and reduce the risk of currency manipulation by federal governments. The system offers a number of benefits not available within the fiat currency ecosystem.

But all of this optimism is contingent on bitcoin gaining mass adoption, something that won’t happen if the government shuts it down preemptively out of fear that the currency can’t be sufficiently regulated or policed.