UpdateBitcoin promoter charged in US with conspiracy to launder money
Charge against leader of trade group promoting currency alleges he helped exchange operator transfer cash to online drugs bazaar Silk Road
The vice-chairman of the Bitcoin Foundation, a trade group promoting the adoption of the digital currency, has been charged by US prosecutors with conspiring to commit money laundering by helping to transfer cash to online drugs bazaar Silk Road.
Charlie Shrem, who had financial backing from entrepreneurs the Winklevoss twins and is known as one of bitcoin's biggest global promoters, was arrested on Sunday at John F. Kennedy International Airport in New York, the US Attorney's Office in Manhattan said.
Shrem, who was also charged with operating an unlicensed money-transmitting business, appeared in US District Court in Manhattan on Monday and was released on US$1 million bond.
"At this point the allegations in the complaint are simply allegations, and Mr Shrem is presumed innocent," his lawyer Keith Miller said.
The 24-year-old entrepreneur, who lives above a bar he jointly owns in Manhattan that accepts bitcoins as payment, was CEO of BitInstant, a bitcoin exchange company that closed last summer. According to prosecutors, Shrem conspired with a Florida resident, Robert Faiella, who ran an illegal exchange, to sell more than US$1 million in bitcoins to users of Silk Road, which was shut down by US authorities last year.
Faiella, 52, is also charged in the complaint filed in US District Court in Manhattan with conspiring to commit money laundering and operating an unlicensed money-transmitting business. He was arrested at his home in Coral Gables, Florida. At his court hearing on Monday in federal court in Florida, Faiella consented to detention until today, when there will be a bail hearing.