The former CEO of BitInstant and former vice chairman at the Bitcoin Foundation Charlie Shrem has been formally indicted for what authorities say was money laundering over $1 million in connection with Silk Road.
Shrem was arrested in late January at John F. Kennedy International Airport following a bitcoin event that took place in Europe. An alleged accomplice, Robert Fiaella, was also arrested in January.
Both men are charged with two counts of operating an unregistered money services business, money laundering conspiracy, and willfully neglecting to submit suspicious activity reports to financial authorities.
The big issue here is that both men are suspected of selling a large volume of bitcoins to users of the now-defunct Silk Road dark web marketplace (although it should be said that other iterations of Silk Road have seen popped up). Those bitcoins were then used to buy illicit goods like drugs.
When Shrem is arraigned in two weeks, he will reportedly plea not guilty. That’s according to his lawyer, Marc Agnifilo. It’s unclear how Fiaella will plea.
If convicted of the most serious charge, money laundering conspiracy, the two could spend as long as twenty years in prison. [source: Bloomberg]