“Sherriff Of Wall Street” Preet Bharara Charges Top Bitcoin Executives With Money Laundering

NEW YORK – Two Bitcoinexecutives have been charged inthe U.S. with conspiring to commitmoney laundering by sellingmore than $ 1 million of thedigital currency to users of anillicit online drugs bazaar ‘SilkRoad’.India-born U.S. Attorney PreetBharara brought the criminalcharges in Manhattan federalcourt against undergroundBitcoin exchanger RobertFaiella, 52, and Chief ExecutiveOfficer and ComplianceOfficer of a Bitcoin exchangecompany Charlie Shrem, 24.The two have been chargedwith conspiring to commitmoney laundering, and operatingan unlicensed money transmittingbusiness.”As alleged, Robert Faiella andCharlie Shrem schemed to sellover $ 1 million in Bitcoins tocriminals bent on traffickingnarcotics on the dark web drugsite, Silk Road,” Bharara said.”Truly innovative businessmodels don’t need to resort toold-fashioned law-breaking, andwhen Bitcoins, like any traditionalcurrency, are launderedand used to fuel criminal activity,law enforcement has nochoice but to act. We willaggressively pursue those whowould co-opt new forms of currencyfor illicit purposes,” hesaid.also the Vice Chairman of afoundation dedicated to promotingthe Bitcoin virtual currencysystem, is charged withfailing to file any suspiciousactivity report regarding Faiella’sillegal transactions through thecompany in violation of federallaws. Shrem, considered one ofthe most prominent players inthe Bitcoin space, was arrestedon Sunday at the city’s John FKennedy International Airport.Faiella was arrested at his residencein Florida and would bepresented in federal court there.The two face up to 25 years inprison.According to allegations in thecriminal complaint, Faiella ranan underground Bitcoinexchange on the Silk Road website,which served as a sprawlingand anonymous black marketwhere illegal drugs of virtuallyevery variety were bought andsold regularly by the site’s users.Operating under the username’BTCKing’, Faiella sold Bitcoins- the only form of paymentaccepted on Silk Road, to usersseeking to buy illegal drugs onthe site. Faiella received ordersfor Bitcoins from Silk Roadusers and filled the ordersthrough a New York-basedcompany.The company was designed toenable customers to exchangecash for Bitcoins anonymously,without providing any personalidentifying information, and itcharged a fee for its service.Shrem was a co-founder andchief executive of a popularwebsite BitInstant. The companywon the backing ofWinklevoss CapitalManagement, which is run bythe Winklevoss twins, who wereearly players in Facebook.After the arrests, the Winklevossbrothers said in a statement thatthey “are obviously deeply concernedabout his arrest”, and”support any and all governmentalefforts to ensure thatmoney-laundering requirementsare enforced”.