Charlie Shrem Sentenced: Former Bitcoin Entrepreneur Gets Two Years in Prison
NEW YORK (InsideBitcoins) -- Bitcoin advocate, early adopter and founding board member of the Bitcoin Foundation, Charlie Shrem was sentenced today as the result of a plea deal struck in September. The former bitcoin entrepreneur was sentenced to two years in prison plus three years of supervised release by U.S. District Judge Jed S. Rakoff.
Charles ShremShrem, 25 of Manhattan, was arrested in January -- along with associate Robert Faiella - accused of selling over $1 million in bitcoins in a money laundering scheme involving users of "Silk Road," the Dark Web black market that was ultimately shut down.
Shrem pleaded guilty to charges of aiding and abetting the operation of an unlicensed money transmitting business, while Faiella pleaded guilty to operating an unlicensed money transfer business.
In entering his plea in September, Shrem told the court that for 11 months in 2012, his company, BitInstant, knowingly helped a man, known to him as BTCKing (Faiella), to process Bitcoin that was then used to buy and sell drugs on Silk Road.
Shrem and Faiella agreed to forfeit $950,000 each to the U.S. government as a part of their plea bargains.
In a tweet, Shrem announced the sentence and his requirement to self surrender in 90 days. "Considering I was facing 30 years, justice has been served," he said. "On a good note, Judge Rakoff called me a brilliant visionary and that he admires my brainpower."
Manhattan U.S. Attorney Preet Bharara said: "Charlie Shrem knowingly facilitated the purchase and use of Bitcoins by others to buy illegal drugs on the Silk Road site. He willfully abdicated his duties as compliance officer of BitInstant, putting illegal profit ahead of legal and ethical responsibility. Now Shrem has been made to answer for his crimes."
"There's no question that Mr. Shrem, over a period of many months, was knowingly, willfully, and to some extent excitedly, even passionately involved in activity that he knew was a serious violation of the law and that was promoting the evil business of trafficking in drugs," Judge Rakoff said in imposing the sentence.
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Just goes to show if you're going to commit a crime in the US it might as well be a white collar crime.