Three months ago, Charlie Shrem, the former Vice Chairman of the Bitcoin Foundation and CEO of the now-defunct BitInstant, was arrested in New York on charges of money laundering and acting as an unlicensed money transmitter. The allegations against Shrem were that he laundered over $1 million in bitcoins for users of Silk Road – the illegal online drug marketplace that was shut down by the FBI back in October 2013, and that he wilfully neglected to report unlawful transactions that were conducted through BitInstant by Robert Faiella, a private bitcoin exchanger who operated under the pseudonym “BTCKing”. As a result, Shrem could face over a decade in prison, but many bitcoiners believe that Shrem was unfairly arrested, and ccn ran a story detailing a complete breakdown of how Charlie Shrem did virtually nothing wrong.
“After reading through the entire criminal complaint against Charlie Shrem, it seems that he is guilty of nothing more than ordering some pot brownies off the Internet.”
However, after unsuccessful plea bargaining talks, the United States formally indicted Charlie Shrem on April 10th. Bloomberg reports that Shrem and Faiella are charged with “two counts of operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities”. Shrem will be arraigned two weeks from now before U.S. District Judge Jed Rakoff, and Shrem’s lawyer, Marc Agnifilo, has stated that his client plans to plead not guilty. But it seems like the U.S. wants to make an example out of Charlie Shrem, and if convicted, Shrem and Faiella could spend a maximum of 20 years behind bars.
Headline image from Vocativ.