New Yourk, NY, United States (4E) – Renowned Bitcoin entrepreneur Charlie Shrem was able to hammer out a plea agreement as to his actuations on the use of the virtual currency on the illicit online marketplace called Silk Road. According to his lawyer, he had facilitated the use of Bitcoin to allow illegal transactions to be done online.
Shrem, during his tenure as vice chairman of the Bitcoin Foundation, was charged with the operation of an unlicensed money transmitting business, conspiracy charges, money laundering and failing to file suspicious activity reports with banking regulatory authorities, the US Treasury Department’s Financial Crimes Enforcement Network or FinCEN.
Under the terms of his plea agreement, he would plead guilty after initially pleading not guilty to the charges. Sentencing would be done later in the year.
At the time of his arrest, Shrem was also the Chief Executive Officer of BitInstant, a Bitcoin exchange company. He was part of a scheme to sell Bitcoins on the so-called Silk Road, which are used by many to purchase illegal drugs as well as armaments.
He was not the only individual charged with the same offenses, as another individual, Robert Faiella was also indicted. In Faiella’s case, he operated a Bitcoin exchange named BTCKing where his site helped facilitate actual illegal purchases using Bitcoins. Faiella is now facing charges of conspiracy, which carries with it possible jail time of up to 20 years.
Shrem, who has been one of the strongest advocates of Bitcoin use as a currency, said in a telephone interview “I’m so happy that it’s coming to a close.” He is very well known in bitcoin circles and is an active evangelist of the virtual currency. He often attends bitcoin related activities and contributes towards the development of the use of the currency online.
With the plea deal, it ends seven months of house arrest as well as an end to uncertainty as to his future. Shrem added, “So, this is a first step of many, but I’m happy to not be going to trial and moving forward.” He remained confident, though the deal would not guarantee him to be free of prison time, that he would be able to avoid imprisonment as no one in criminal history has been incarcerated for unlicensed money transmission alone.
For its part, the office of Manhattan US Attorney Preet Bharara’s spokesperson James Margolin did not immediately respond to an email inquiry sent after office hours on the matter.
Last year, federal authorities had shut down the website called Silk Road. The site has become the marketplace for illegal drugs and other items and they use online currency Bitcoin to cover up their digital tracks and identities. Despite the authorities best efforts, a new website was launched with the same items online similar to Silk Road.
Now, prosecutors are trying to build a case against Ross William Ulbricht, the man believed to have created and operated the website Silk Road. He used the pseudonym “Dread Pirate Roberts” and he is to stand trial starting November 3, 2014.