Tag Archives: money laundering

Two High Profile Bitcoin exchange operators arrested & charged with money laundering

Two men involved in Bitcoin exchanges have now been arrested and charged with money laundering, with federal law enforcement officials claiming the suspects worked together to sell over $1 million worth of the online currency to the Silk Road website.

Charlie Shrem, the CEO of the now closed BitInstant exchange site, and underground Bitcoin exchanger Robert Faiella, are accused of sending the Bitcoins to the Silk Road site so that it could be used by the site’s customers to purchase illegal drugs. The Silk Road site has since been shut down. In theDepartment of Justice’s press release, Manhattan U.S. Attorney Preet Bharara stated:

Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.

Shrem was arrested while he was at John F. Kennedy Airport in New York City on Sunday night, while Faiella was arrested at his Florida home today. Both men are charged with one count of money laundering, which has a maximum sentence of 20 years in prison. Both were also charged with one count of operating an unlicensed money transmitting business, which could lead to up to five years in jail. Finally, Shrem was charged with one count of willful failure to file a suspicious activity report, which could add up to five more years in prison for him if convicted.

Source: Justice Department | Bitcoin image via Shutterstock

Two Bitcoin exchange operators charged with money laundering – Neowin.