2 Bitcoin operators plead guilty in Silk Road case | Business & Technology | The Seattle Times

The top executive of a New York City-based Bitcoin company and a Florida Bitcoin exchanger pleaded guilty Thursday to federal charges, admitting that they enabled the digital currency to be funneled to the black market website Silk Road.

By LARRY NEUMEISTER Associated Press

NEW YORK —

The top executive of a New York City-based Bitcoin company and a Florida Bitcoin exchanger pleaded guilty Thursday to federal charges, admitting that they enabled the digital currency to be funneled to the black market website Silk Road.

Charlie Shrem, 24, of Manhattan, pleaded guilty in federal court there to aiding and abetting the operation of an unlicensed money transmitting business, while Robert Faiella, 54, of Cape Coral, Florida, pleaded guilty to operating an unlicensed money transfer business.

Sentencing was set for Jan. 20, when each faces as much as five years in prison.

The case grew from the government’s shutdown of Silk Road. Shrem was chief executive officer of BitInstant; Faiella operated an unlicensed money transferring business.

They were accused of letting more than $1 million in Bitcoins reach the website. Both admitted during their pleas that they knew narcotics were bought and sold on the website.

U.S. District Judge Jed S. Rakoff asked Faiella whether he knew from December 2011 through last October that his Bitcoins would be used to buy and sell drugs and that it was illegal.

“Absolutely,” Faiella answered.

via 2 Bitcoin operators plead guilty in Silk Road case | Business & Technology | The Seattle Times.

2 thoughts on “2 Bitcoin operators plead guilty in Silk Road case | Business & Technology | The Seattle Times

  1. How can the Florida man been charged with the stated charge? The U.S. Gov’t (I.R.S.) has stated that Bitcoin is NOT money in their eyes it is Property for tax purposes. Yes a Drug charge should be handed down, but stated Bitcoin as money doesn’t make sense!

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