HomeBitcoin NewsBitcoin entrepreneur Accused of Silk Road Money Laundering

Bitcoin entrepreneur Accused of Silk Road Money Laundering


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A top bitcoin entrepreneur was found guilty last Thursday in New York for unlawfully assisting in the sale of $1 million cash to consumers on Silk Road, a Dark Web site used secretly to buy and sell drugs and other illegal imports.

The Chief Executive Officer of the Bitcoin Exchange Company BitInstant.com Charlie Shrem was the Company officer at the time and was charged with the responsibility of ensuring that the law governing federal money laundering acts is adhered to.
If he is found guilty, he could be imprisoned for not less than five years. Shrem took an appeal and consequently, he doesn’t have to attend all trials on the serious charges he faces of Bank Secrecy Act infringement and money laundering which apparently take a longer time in prison.

Robert Faiella, also known as the ‘’BTCKing’’ in his online handle pleaded guilty on Thursday for working with a money transmitting business that wasn’t authorized and which deliberately sent out money to finance illegal activities. He could be jailed for five years too.

Their verdict will be released on Jan 20th.
In his statement, the Justice Department said that the duo, Faiella, who’s the Silk Road dealer and Shrem, converted almost $1 million cash to bitcoins to favor the Silk Road users to enable them acquire items or products in an unauthorized way on Silk Road.
On Oct 2nd 2013, Silk Road, an expansive online black market with various stores was closed by the Federal agent. The website that was also known as The Onion Router, routed the users via various computers for purposes of hiding their personalities as well as locations. Both the buyers and the sellers that operated on that particular site as business entrepreneurs used the digital currency bitcoin, and they all remained unidentified.

Initiated in 2009, bitcoin is a decentralized digital currency that operates not through banks, but through individuals; that is from one individual to another. At the moment, there’s no country or central bank providing or regulating its use, but it is rather created by an algorithm of a computer. In developed countries like the USA, the currency is legally accepted, and even used by some big business enterprises as a means of payment.

The prosecutors in the case also established that the 54 year old Silk Road dealer, a resident of Fla… in the City of Cape Coral had operated the bitcoin exchange on that site from December 2011 till it was closed down. The prosecutors added that Faiella never registered his business as a money transmitting business with the Treasury Department, thereby violating even the federal laws. It was also discovered that it was Shrem’s Company that the culprit used as a medium to exchange his customers’ cash for bitcoin.

According to the prosecutors, Shrem, who’s the CEO of Bitcoin Exchange Company BitInstant.com, was well aware that Faiella was running a bitcoin exchange service for Silk Road users on the Silk Road website, which he also knew was a drug-trafficking website. In the midst of all these, Shrem even took care of the money exchange process, in a bid to put the business out of sight of his partners.
Shrem was BitCoin Foundation’s Vice President until Jan 20th when the accusations were made against him.


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Yashu Gola
Yashu Golahttp://www.lafzbook.wordpress.com
Yashu Gola is an IT-graduate with an intense interest in Bitcoin technology. The techie has been writing on cryptocurrencies for over a year now (over 700 articles to his credit), and is keenly enthusiast about the day-to-day discoveries this sector is making. With Live Bitcoin News, he is looking forward to bring forth his views on the latest Bitcoin events and everything that surrounds it.

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