The End Of The (Silk) Road For Bitcoin Millionaire

The End Of The (Silk) Road For Bitcoin Millionaire You think Charlie Shrem would know that. Shrem is the CEO/founder of BitInstant and a self-proclaimed millionaire at the age of 24. BitInstant is a Bitcoin exchange which heated up over the past two years. The company attracted considerable attention, including from Cameron and Tyler Winklevoss, who invested $1.5 million into the company. But today, the company looks very different. As does the website. The website went dark (or, um, light) after Shrem was arrested earlier this week on charges of money laundering, operating an unlicensed money transmitting business and willful failure to file a suspicious activity report. Shrem has been charged alongside Robert M. Faiella, an underground Bitcoin exchanger. According to the complaint, Faiella would receive orders for Bitcoin to fill through his exchange. He would then sell them to consumers on the now-defunct Silk Road for a profit. Silk Road is an online black market shut down by the FBI in the fall of 2013. The government has been closing in on a number of those involved in Silk Road which was known, among other things, to be a virtual pharmacy for illegal drugs of all kinds – paid for in Bitcoin, the only currency accepted on the web site. Ross William Ulbricht, the administrator of the site known as “Dread Pirate Roberts” was previously arrested on charges including money laundering and drug trafficking. The feds allege that Shrem knew exactly what Faiella was doing when he used the Bitcoin exchange. In fact, the feds claim Shrem knew all about Silk Road since he used the site to buy drugs such as cocaine for his own use. Despite what he knew about Faiella and the site, Shrem did not file a suspicious activity report, as is required. Instead, he encouraged Faiella to continue his business because it was profitable for BitInstant – and for his own pockets. Together, Shrem and Faiella are said to have laundered over $1 million for illegal purposes.