A Texas man was arrested Thursday and charged with running a bitcoin Ponzi scheme that in its height accounted for about 7% of the virtual currency in public circulation, the Manhattan U.S. Attorney said.

Trendon Shavers, under the alias pirateat40, raised more than 760,000 bitcoins in investments through his firm, Bitcoin Savings and Trust, from at least Sept. 2011 to Sept. 2012, according to court documents.

The...