A bitcoin promoter has pleaded guilty to sending send more than $1 million in the digital currency to users of an online marketplace for illegal drugs and other contraband - but wants to stay in business.
Charlie Shrem, 24, pleaded guilty at a hearing in New York federal court to one count of aiding and abetting an unlicensed money transmitting business, namely the marketplace Silk Road.
Shrem admitted he knew he was doing wrong and the marketplace was used for the sale of illegal drugs.
Shrem wants to continue to work with bitcoin and his lawyer, Marc Agnifilo stressed his client was not involved in directly supplying bitcoin to Silk Road users.
A co-conspirator, Robert Faiella, 54, separately pleaded guilty to operating such a business. Both men face up to five years in prison when they appear again in court in January.
The two pleaded guilty as part of a deal struck with prosecutors from the office of Manhattan US Attorney Preet Bharara. They had been scheduled to go on trial September 22.
US authorities shut down Silk Road last year, though a new version bearing the same name was launched soon thereafter. The man accused of creating and operating Silk Road using the alias “Dread Pirate Roberts,” Ross William Ulbricht, is facing separate charges and is scheduled for trial in November.
Shrem stepped down from his post as vice chairman of the Bitcoin Foundation, a trade group, soon after his arrest in January. He was previously the chief executive of BitInstant, a bitcoin exchange company.
Shrem processed transactions for Faiella through BitInstant despite knowing the bitcoin would eventually find their way to Silk Road, where the funds would be used for drugs, he said in court.
Both men agreed to forfeit $950,000 to the government as part of their plea deals.
Additional reporting by ReutersReuse content