Bitcoin business executive Charles Shrem arrested

Charles Shrem was arrested in New York Sunday in connection with drug transactions, both personal and through his company.
Posted By Ananth Baliga   |   Jan. 27, 2014 at 3:41 PM   |   Comments

NEW YORK, Jan. 27 (UPI) -- Charles Shrem, founder and CEO of Bitinstant and outspoken supporter of the Bitcoin virtual currency, was arrested Sunday in connection with drug transactions related to the now-defunct Silk Road online market.

Shrem, who was arrested at New York's John F. Kennedy Airport, is charged with using his company to convert money anonymously for people who were buying narcotics on the Silk Road site and is also charged with buying narcotics for himself.

Silk Road was an online black market shut down last October by the Federal Bureau of Investigation, though it has been reported that Silk Road 2.0 was operation last November.

Shrem was allegedly working with Robert Faiella, known as the BTCKing, who was arrested Monday. When Shrem was asked about his cooperation with Faiella, he responded by saying that “we make good profit from him.”

Shrem's company Bitinstant shut down last year, though he planned to restart the company, which sells Bitcoins for regular currency. Shrem is also the vice chairman of the Bitcoin Foundation, a non-profit that educates people about Bitcoins.

“We are surprised and shocked by the news today. As a foundation, we take these allegations seriously and do not condone illegal activity,” said Jinyoung Englund, a spokeswoman for the foundation.


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