The CEO of BitInstant, Charlie Shrem, has reportedly been arrested at New York City’s JFK International Airport, accused of selling over $1 million worth of bitcoins to users of the famed (and now defunct) Silk Road drug trade site on the darknet.
The report released by the Southern District of New York on Monday revealed Shrem himself purchased illicit substances on Silk Road.
Another individual who reportedly ran a bitcoin exchange, Robert M. Faiella, was also arrested on similar charges.
“As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road. Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes,” said Manhatten U.S. Attorney Preet Bharara.
As of this writing, BitInstant’s website is down, not surprisingly. Read the full complaint here.