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Bitcoin exchangers charged with money laundering

New York – The Manhattan district attorney’s office has brought federal money laundering charges against two men involved in exchanging Bitcoin virtual currency. According to media reports, Bitcoin exchanger Robert M. Faiella, 52, and Charlie Shrem, 24, the CEO of the Bitcoin exchange company BitInstant, have been charged with conspiring to commit money laundering and operating an unlicensed money-transmitting business.

The charges relate to an alleged scheme to sell more than $1 million worth of Bitcoins to narcotics traffickers on Silk Road, an underground website dedicated to the global online sale of narcotics and other illicit goods which the FBI shut down in October 2013. Silk Road used Bitcoins as currency. Since the Silk Road bust, the FBI has been investigating people involved in its operation as well as those who bought and sold goods on the site.

"The charges announced today depict law enforcement's commitment to identifying those who promote the sale of illegal drugs throughout the world," said James J. Hunt of the U.S. Drug Enforcement Administration in a news release. "Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way."

 

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