A Texas man was arrested Thursday and charged with fostering a bitcoin-related Ponzi scheme, in what is the first securities fraud case involving the crypto currency ever lodged by US prosecutors.

Prosecutors said the defendant, Trendon Shavers, is accused [PDF] of promising investors "absurdly high interest" in exchange for turning over their bitcoin to him. Investors were falsely promised that their bitcoin was recoverable at any time, the authorities said.

"Shavers used a new currency, but the same old reprehensible tricks," said George Venizelos, an assistant FBI director in New York. "He claimed to offer a bitcoin market-arbitrage strategy. In reality, it was nothing more than an insidious scheme motivated by greed. Today, Shavers’ jig is up. He finds himself under arrest and charged in Manhattan federal court."

US Attorney Preet Bharara of Manhattan said the defendant, between 2011 and 2012, "ultimately cheated his investors out of their bitcoin investments." At one point in the scam, the authorities said, Shavers held as much as 7 percent of all bitcoins being circulated.

The authorities said Shavers, 32, operated the Bitcoin Savings and Trust and promoted his investments in the online "Bitcoin Forum." He reaped as many as 764,000 bitcoins, valued at about $4.5 million, the authorities said. They said he used bitcoin from new investors to make payments to other investors or to cover a bitcoin withdrawal. At least 48 of 100 investors lost all or part of their investment, the authorities said.