Bitcoin promoter Shrem indicted in NY for money laundering
NEW YORK (Reuters) - Prominent bitcoin entrepreneur Charlie Shrem has been indicted by a federal grand jury in New York on charges of funneling cash to the illicit online marketplace Silk Road.
Shrem, known as one of the digital currency’s most visible promoters, is accused of conspiring with a Florida man, Robert Faiella, to sell more than $1 million in bitcoins to the users of Silk Road despite knowing that it would be spent on illegal uses like drug trafficking.
Both Shrem and Faiella face charges of money laundering, conspiracy and failing to file suspicious activity reports with government banking authorities, according to the indictment filed by Manhattan U.S. Attorney Preet Bharara.
Shrem’s lawyer, Marc Agnifilo, and Faiella’s lawyer, David Braun, did not immediately respond to a request for comment on Monday.
Federal authorities shut down Silk Road last year, and prosecutors from Bharara’s office have charged Ross William Ulbricht with operating the site under the name “Dread Pirate Roberts.”
Shrem, 24, was arrested in January and stepped down as vice president of the Bitcoin Foundation, a well-known trade group, soon after. He was previously CEO of BitInstant, a bitcoin exchange company that enjoyed financial backing from the twins Cameron and Tyler Winklevoss but closed last year.
Bitcoin is a digital currency, not backed by any government or central bank, that fluctuates in value according to its users’ demand. Users can transfer bitcoins to each other online and store the currency in digital “wallets.”
Authorities have vowed to pursue those who use bitcoin to complete illegal transactions, while regulators are still grappling with their approach to the nascent currency.
The recent failure of Japan's Mt. Gox, which filed for bankruptcy after apparently losing hundreds of millions of dollars worth of bitcoins, has underscored concerns about the currency’s long-term viability.
Shrem will be arraigned on the indictment on April 29, according to Bharara’s office. He faces a maximum prison term of 20 years if convicted on the most serious charge.
- Tweet this
- Share this
- Digg this
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- California lawmakers end session with bills on plastic bags, gun control
- India says Pakistan border clashes "extremely serious and provocative"
- EU says could send over 1 bln euros more aid to Ukraine
- India nears $2.5 billion deal for Boeing military helicopters
A judge on Friday lifted a suspension on her order directing Microsoft Corp to turn over a customer's emails stored overseas to U.S. prosecutors, but the software company said it would not release any emails while it appeals the ruling. Full Article
China's Tencent shuts messaging accounts after censorship rules - state media. Full Article
Data scientists are increasingly becoming important to the world's tech companies. Video