But according to the decision, Shavers used new bitcoin to repay earlier investors, diverted some to personal accounts at the now-bankrupt Mt. Gox exchange and elsewhere, and spent some investor funds on rent, food, shopping and casino visits.

"The collective loss to BTCST investors who suffered net losses (there were also net winners) was 265,678 bitcoins, or more than $149 million at current exchange rates," wrote Mazzant, who sits in Sherman, Texas.

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Mazzant held Shavers and his company liable to give up $38.6 million of illegal profits plus $1.8 million in interest. Each defendant was also fined $150,000.

The SEC announced the case on July 23, 2013, the same day it warned investors to be on alert for potential scams involving bitcoin and other "cutting-edge" investments.

The case is SEC v. Shavers et al, U.S. District Court, Eastern District of Texas, No. 13-00416.

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$40.7M awarded in bitcoin Ponzi case