Charlie Shrem, a 24 year old New York-based businessman and one of bitcoin’s early supporters was arrested on Sunday at New York’s JFK airport on charges of money laundering, according to The Daily Mail.
Shrem has been charged with conspiring with a 52 year old Florida man, Robert Faiella, who has also since been arrested, to sell millions of dollars worth of bitcoins to users of the Silk Road underground online marketplace. Silk Road was shut down in October, 2013 and its owner arrested, but before its closure it was known to accept the digital currency in return for illicit goods, including drugs and guns.
Authorities say Shrem knew that Faiella was buying bitcoin for sale to users of Silk Road. Shrem’s possible culpability stems from – at the very least – not reporting suspicious activity, something he was obliged to do under the US’s Bank Secrecy Act.
Other charges laid against Shrem include “Operating an unlicensed money transmitting business”. Shrem appeared in the US District Court in Manhattan on Monday, and was released on a $1 million bail bond.
The Daily Mail said that as well as being the vice chairman of the Bitcoin Foundation, a trade group that promotes the adoption of the digital currency, Shrem is the owner/operator of BitInstant.com – a popular online bitcoin exchange – and part-owner of a bar in Manhattan that accepts bitcoin as payment.
Arrests like these, and any association with illicit activities don’t do the perception of the digital currency any favours by casting it in a poor light. That aside, there are still many reasons to prefer bitcoin over traditional currencies like its decentralised, self-regulating and completely anonymous nature. Looking at the growing number of retailers willing to accept it internationally, a figure that is growing every day even here in South Africa, bitcoin has a long way to go before stories like these will truly undermine its worth.
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