Tuesday 12 December 2017

Bitcoin dealers in money-laundering charge

Two Bitcoin dealers have been accused of money laundering
Two Bitcoin dealers have been accused of money laundering

Emily Flitter

Two men who operate bitcoin exchange businesses have been charged with money laundering for helping drug merchants exchange $1m (€731,487) in cash for bitcoins, US prosecutors said yesterday.

Prosecutors have charged Charlie Shrem and Robert Faiella for attempting to sell $1m in the digital currency to users of the underground black market website Silk Road, which was shut down by authorities in September.

According to the charging document, Mr Shrem (24), chief executive officer of the exchange BitInstant.com, changed cash into bitcoins for Mr Faiella (52), who ran an underground bitcoin exchange through the username BTCKing on Silk Road's website.

The criminal complaint says that Mr Shrem, in addition to knowing that Mr Faiella's business was funnelling money into Silk Road, also used Silk Road himself to buy drugs. The US Attorney's office said in a statement that authorities arrested Mr Shrem on Sunday at New York's John F Kennedy International Airport.

Mr Faiella was arrested on Monday at his home in Cape Coral, Florida.

The tech investors Cameron and Tyler Winklevoss invested $1.5m in BitInstant last year.

A spokeswoman for their firm, Winklevoss Capital, did not immediately respond to a request for comment.

Irish Independent

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