Bitcoin entrepreneurs Charlie Shrem and Robert Faiella charged with money laundering
Both men are accused of conspiring to commit money laundering and operating an unlicensed money transmitting business
Two Bitcoin entrepreneurs have been arrested and charged with money laundering by US authorities.
Charlie Shrem, chief executive of New York-based BitInstant, and Robert Faiella, a virtual currency trader known as BTCKing, allegedly conspired to sell over $1 million Bitcoins (£603,000) to users of black market website Silk Road, who allegedly used the site to buy drugs anonymously.
Silk Road was shut down by the FBI last year.
Shrem, 24, was arrested on Sunday morning at New York's JFK International Airport. Faiella, 52, was arrested on Monday in his Florida home.
In the federal criminal complaint, both men are accused of conspiring to commit money laundering, and operating an unlicensed money transmitting business.
Shrem is also accused of failing to report Faiella's illegal transactions, violating the Bank Secrecy Act, which requires financial institutions to alert authorities of suspicions of money laundering.
US Attorney for Manhattan Preet Bharara said in a statement: "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 lawbreaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."
Tyler and Cameron Winklevoss - the millionaire twins who sued Mark Zuckerberg claiming Facebook had been their idea- told the BBC they were "deeply concerned" about the allegations.
The Winklevoss brothers invested in the Bitcoin exchange in 2012 and led a capital raising effort that raised $1.5 million last year.
They said: "When we invested in BitInstant in the fall of 2012, its management made a commitment to us that they would abide by all applicable laws - including money laundering laws - and we expected nothing less.
"We are obviously deeply concerned about (Shrem's) arrest. We were passive investors in BitInstant and will do everything we can to help law enforcement officials."
Full indictment here
- 1 What happens to your body when you give up sugar?
- 2 This is what the photographer has to say about the picture of a weasel riding a woodpecker
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Pornhub turns masturbation into energy in bid to save the planet
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...