Nation & World News

CEO Of A Bitcoin Exchange Charged With Money Laundering

By Mark Memmott on January 27th, 2014

Charlie Shrem, CEO of the BitInstant bitcoin exchange, and another man have been charged with allegedly laundering money for individuals who illegally bought drugs online.

Pretty Bharara, U.S. attorney for the Southern District of New York, alleged Monday that Shrem and underground bitcoin exchanger Robert Faiella (“a.k.a. BTCKing”) were part of “a scheme to sell over $1 million in Bitcoins to users of ‘Silk Road,’ the underground website that enabled its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement.”

According to a Justice Department statement, “each defendant is charged with conspiring to commit money laundering, and operating an unlicensed money transmitting business.”

Shrem was arrested Sunday at John F. Kennedy International Airport in New York, “and is expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Henry Pitman,” Justice says. “Faiella was arrested today at his residence in Cape Coral, Fla., and is expected to be presented in federal court in the Middle District of Florida.”

BitInstant, as Business Insider says, is currently offline.

Time magazine writes that:

“The complaint alleges that Faiella took orders from Silk Road users hoping to purchase Bitcoin, the anonymous peer-to-peer crypto-currency. Shrem then filled the orders by transferring funds into an account controlled by Faiella and hosted on a third-party Japan-based Bitcoin exchange. Together the two allegedly sold over $1 million in Bitcoin to Silk Road users, who then used those Bitcoins to attempt to purchase anonymously drugs and other illegal goods from the deep web black market.”

The criminal complaint against the men is here.

NPR’s Jacob Goldstein and David Kestenbaum have previously answered the question “What Is Bitcoin?” on the Planet Money blog. They explained it, in part, this way:

“Bitcoin is a lot like cash — for the online universe. It doesn’t actually exist in the physical world. You can’t hold bitcoins in your hand; they exist only on computers. There is no center to the whole bitcoin system. It’s not like there’s one computer somewhere storing all the information. It’s a peer-to-peer system, run by the people who use it.

“To truly understand bitcoin, you need to use it. We started by visiting an online exchange where you can trade actual dollars for the virtual currency.”

David has also posted on one bitcoin insider’s thoughts about “crime, Congress and Satoshi Nakamoto.”

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

This entry was posted in News from NPR. Bookmark the permalink.

Comments are closed.

 

More Stories in News from NPR

Ukrainian troops camouflage their multiple rocket launcher at a checkpoint in Kryva Luka, in eastern Ukraine, earlier this month. The U.S. says Russia is planning to provide similar systems to the rebels.

U.S.: Russia-Based Artillery Targeting Ukrainian Troops

The State Department says it has evidence that Moscow is lobbing artillery across its border at Ukrainian government forces, and that the Kremlin plans to ship rocket artillery to the rebels.


Arturo, the only polar bear in Argentina, lives in captivity at a zoo in Mendoza. The plight of the "sad bear" has spawned more than 400,000 signatures on a petition to get him moved to a "better life" in Canada.

Zoo In Argentina Says ‘Sad Bear’ Too Old To Go To Canada

The plight of the nearly 30-year-old polar bear, who lost his enclosure mate two years ago, has attracted attention from well-wishers the world over who want him moved.


Barbed-wire fence surrounding a military area is pictured in the forest near Stare Kiejkuty village, close to Szczytno in northeastern Poland. The CIA ran a secret jail on Polish soil, the European Court of Human Rights ruled Thursday.

European Court Rules Against Poland In CIA ‘Black Sites’ Case

The European Court of Human Rights said Poland broke the European human rights convention by allowing the CIA to imprison and torture two terrorism suspects in secret prisons on its soil.


U.S. Database Glitch Delays Passport, Visa Processing

The problem in the U.S. State Department system could cause problems for millions of people worldwide who are awaiting travel documents.


Palestinian children, wounded in a July 24 Israeli strike on a compound housing a U.N. school in Beit Hanoun, in the northern Gaza Strip, lay on the floor of an emergency room at the Kamal Adwan hospital in Beit Lahiya. Israeli tank shells hit the compound, killing more than a dozen people and wounding dozens more who were seeking shelter from fierce clashes on the streets outside.

Israeli Artillery Hits U.N.-Run School In Gaza

More than a dozen people have been killed at the school used as a shelter in Beit Hanoun, according to Palestinian officials.


Thank you for your support

WUFT depends on the support of our community — people like you — to help us continue to provide quality programming to North Central Florida.
Become a Sustainer
I want to support FM 89.1/NPR
I want to support Florida's 5/PBS
Donate a Vehicle
Day Sponsorship Payments
Underwriting Payments