Former Bitcoin Foundation chair pleads guilty to money-laundering charge

Charlie Shrem plea deal could still get him five YEARS in chokey

Former Bitcoin Foundation chair and BitInstant CEO Charlie Shrem has entered a guilty plea on charges that he operated an illegal currency trading operation, and will fork out nearly a million dollars to the US government, in a deal that avoids a trial that was due to start on September 22.

Shrem, who resigned his position at the Bitcoin Foundation in January following his arrest, has owned up that not only did he process transactions on behalf of the now-defunct Silk Road, but that he knew the online marketplace was a haunt of drug dealers.

According to Reuters, Shrem told the court that he “knew that much of the business on Silk Road involved the buying and selling of narcotics”.

Another trader, Robert Faiella – once BTCKing on Silk Road – entered the same plea. Reuters reports that both have agreed to forfeit US$950,000 to the government.

Neither Shrem nor Faiella are out of the woods yet. The Reuters report adds that their separate plea bargains with the FBI could still see them get as much as five years behind bars, and fines of at least US$250,000 for their dealings with Silk Road, which was closed by the Feds in 2013.

Shrem's lawyer says his actions were at one step removed from dealing in drugs himself, something he presumably hopes will moderate whatever sentence gets handed down in January 2015: “We believe he is at least one step more removed from the heartland of illegal conduct, which is really Silk Road”, the lawyer told Reuters.

Shrem hopes to return as a Bitcoin dealer one day, the lawyer said. ®

Similar topics

Other stories you might like

Biting the hand that feeds IT © 1998–2021