The Justice Department has officially charge the CEO of Bitcoin central Bitinstant.comwith run away an illegal wire service , and according to reports bythe New York Post ’s Kaja Whitehouse , he ’s just been nab at JFK . Uh oh .
The cathexis against Bitinstant ’s 24 - year erstwhile CEO Charlie Shrem are more sophisticated than just “ run a Bitcoin rally . ” Instead , they ’re tied up with the sale of Bitcoins to user of “ Silk Road , ” whose leaning to spend it on drug turns the whole affair a money - laundering scheme , so far as the Justice Department is refer .
From the Justice Department ’s public press release :
… felonious charges in Manhattan federal court against ROBERT M. FAIELLA , a / kibibyte / a “ BTCKing , ” an hugger-mugger Bitcoin exchanger , and CHARLIE SHREM , the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company , for occupy in a scheme to trade over $ 1 million in Bitcoins to substance abuser of “ Silk Road , ” the clandestine website that enable its users to buy and trade illegal drugs anonymously and beyond the reach of law enforcement . Each defendant is charged with complot to commit money laundering , and operating an unlicensed money transmitting business .
And it in all likelihood does n’t help that Shrem can be identified as a “ proud stoner . ”
The trouble is , separate the act of selling some Bitcoin from the fact that buyers might be spend that Bitcoin on drugs is problematic , near impossible . The same could be reliable of afford someone a immediate payment loanword or selling anything for cash , though the difference of opinion there is that you are n’t going outside of United States currency , or operate on over the internet with stark anonymity .
The charge contained in the Justice Department ’s release are only charge , and Shrem will have to be turn up guilty before they stick . But if it turns out that the operator of awell - known , well - funded , and well - connectedBitcoin rally can be hold accountable for money laundering if his vendee might take that ‘ coin and now turn to a cyber drug ring , Bitcoin exchanges everywhere are pass away to have a huge uphill battle to struggle . [ Business Insider ]
http://valleywag.gawker.com/winklevoss-backed-bitcoin-startup-busted-by-fbi-1509849706
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