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Bitcoin executive targeted in Silk Road money laundering scheme

A major Bitcoin supporter has been arrested and charged with money laundering, for his role in supporting the now shut down Silk Road drug website.

Published Mon, Jan 27 2014 1:28 PM CST   |   Updated Sat, Aug 8 2020 10:29 AM CDT

BitInstant CEO Charlie Shrem was recently arrested and charged with conspiracy to commit money laundering, accused of funneling funds for the now defunct Silk Road website. Specifically, Shrem and his accused partner, Robert Faiella, allegedly sold more than $1 million in Bitcoin to Silk Road users, with the funds later used to purchase drugs and other illegal goods.

Bitcoin executive targeted in Silk Road money laundering scheme | TweakTown.com

"The charges announced today depict law enforcement's commitment to identifying those who promote the sale of illegal drugs throughout the world," said James Hunt, DEA spokesperson, in a statement. "Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way."

Shrem also used Silk Road to order marijuana brownie edibles, with the Drug Enforcement Administration (DEA) and Internal Revenue Service lending a hand in the investigation, according to the U.S. Attorney for the Southern District of New York.

This is a major blow to the Bitcoin community, as Shrem has traveled the world to promote the use of Bitcoins for consumers and businesses alike. As federal investigators continue to look for financial backers and supporters of the Silk Road operation, additional high-profile arrests are possible later down the road.

NEWS SOURCES:ft.com, latimes.com

An experienced tech journalist and marketing specialist, Michael joins TweakTown looking to cover everything from consumer electronics to enterprise cloud technology. A former Staff Writer at DailyTech, Michael is now the West Coast News Editor and will contribute news stories on a daily basis. In addition to contributing here, Michael also runs his own tech blog, AlamedaTech.com, while he looks to remain busy in the tech world.

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