- The Washington Times - Monday, January 27, 2014

The CEO of BitInstant, a New York-based bitcoin exchange, was arrested Sunday at John F. Kennedy International Airport and charged with money laundering.

In the federal criminal complaint, Charlie Shrem, alongside co-conspirator Robert Faiella, are charged with selling more than $1 million in bitcoins to users of black market website Silk Road, who would then use them to buy drugs and other contraband.

“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” DEA agent James Hunt said in a statement.

The complaint charges that Mr. Shrem personally bought drugs on Silk Road and “was fully aware that Silk Road was a drug-trafficking website, and through his communications with Faiella, Shrem also knew that Faiella was operating a bitcoin exchange service for Silk Road users.”

Both men are charged with conspiring to commit money laundering and operating an unlicensed money transmitting business.

(h/t Business Insider)

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