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Bitcoin promoter pleads guilty to unlicensed use of currency

  1. desert flower
    [imgr=white]https://img2.drugsforum.eu/albums/thumbs/32/ca9b8b18004d9a2885f94848bd2e7151_32405.jpg?dl=1410273055[/imgr]
    NEW YORK (Reuters) - A man who helped to promote bitcoin wants to remain in the business despite pleading guilty Thursday to indirectly helping send more than $1 million in the digital currency to users of the illicit online marketplace Silk Road, his lawyer said.

    Charlie Shrem, 24, pleaded guilty at a hearing in New York federal court to one count of aiding and abetting an unlicensed money transmitting business.


    Bitcoin advocates make their case in Chicago for the digital currency
    Cheryl V. Jackson
    A co-conspirator, Robert Faiella, 54, separately pleaded guilty to operating such a business. Both men face up to five years in prison when they appear again in court in January.

    "I knew that much of the business on Silk Road involved the buying and selling of narcotics," Shrem said in court. "I knew that what I was doing was wrong."

    His lawyer, Marc Agnifilo, said that what Shrem did was an aberration and that Shrem plans to continue working in the bitcoin world if possible. Agnifilo emphasized that his client was not involved in directly supplying bitcoin to Silk Road .

    "We believe he is at least one step more removed from the heartland of illegal conduct, which is really Silk Road," the lawyer said.

    The two pleaded guilty as part of a deal struck with prosecutors from the office of Manhattan U.S. Attorney Preet Bharara. They had been scheduled to go on trial
    NEW YORK (Reuters) - A man who helped to promote bitcoin wants to remain in the business despite pleading guilty Thursday to indirectly helping send more than $1 million in the digital currency to users of the illicit online marketplace Silk Road, his lawyer said.

    Charlie Shrem, 24, pleaded guilty at a hearing in New York federal court to one count of aiding and abetting an unlicensed money transmitting business.


    Bitcoin advocates make their case in Chicago for the digital currency
    Cheryl V. Jackson
    A co-conspirator, Robert Faiella, 54, separately pleaded guilty to operating such a business. Both men face up to five years in prison when they appear again in court in January.

    "I knew that much of the business on Silk Road involved the buying and selling of narcotics," Shrem said in court. "I knew that what I was doing was wrong."

    His lawyer, Marc Agnifilo, said that what Shrem did was an aberration and that Shrem plans to continue working in the bitcoin world if possible. Agnifilo emphasized that his client was not involved in directly supplying bitcoin to Silk Road users.


    "We believe he is at least one step more removed from the heartland of illegal conduct, which is really Silk Road," the lawyer said.

    The two pleaded guilty as part of a deal struck with prosecutors from the office of Manhattan U.S. Attorney Preet Bharara. They had been scheduled to go on trial Sept. 22.




    U.S. authorities shut down Silk Road last year, though a new version bearing the same name was launched soon thereafter. The man accused of creating and operating Silk Road using the alias "Dread Pirate Roberts," Ross William Ulbricht, is facing separate charges and is scheduled for trial in November.

    Shrem stepped down from his post as vice chairman of the Bitcoin Foundation, a trade group, soon after his arrest in January. He was previously the chief executive of BitInstant, a bitcoin exchange company.

    Prosecutors said Faiella, 54, operated an underground bitcoin exchange on Silk Road under the name "BTCKing," providing currency for users engaged in illicit drug trafficking.


    Shrem processed transactions for Faiella through BitInstant despite knowing the bitcoin would eventually find their way to Silk Road, where the funds would be used for drugs, he said in court.

    Both men agreed to forfeit $950,000 to the government as part of their plea deals.

    "Robert Faiella and Charlie Shrem opted to travel down a crooked path - running an illegal money transmitting business that catered to criminals bent on trafficking narcotics on the dark web drug site, Silk Road," Bharara said in a statement.



    (Reporting by Joseph Ax; Editing by David Ingram, Lisa Shumaker and Andrew Hay)


    U.S. authorities shut down Silk Road last year, though a new version bearing the same name was launched soon thereafter. The man accused of creating and operating Silk Road using the alias "Dread Pirate Roberts," Ross William Ulbricht, is facing separate charges and is scheduled for trial in November.

    Shrem stepped down from his post as vice chairman of the Bitcoin Foundation, a trade group, soon after his arrest in January. He was previously the chief executive of BitInstant, a bitcoin exchange company.

    Prosecutors said Faiella, 54, operated an underground bitcoin exchange on Silk Road under the name "BTCKing," providing currency for users engaged in illicit drug trafficking.


    Shrem processed transactions for Faiella through BitInstant despite knowing the bitcoin would eventually find their way to Silk Road, where the funds would be used for drugs, he said in court.

    Both men agreed to forfeit $950,000 to the government as part of their plea deals.

    http://www.chicagotribune.com/news/nationworld/sns-rt-us-usa-crime-bitcoin-20140819-story.html

Comments

  1. desert flower
    Re: silk road when you think it's over....

    some people have far more money than intelligence.
    scary if you think the right way.
  2. kumar420
    Re: silk road when you think it's over....

    Convenient for the government. We get the 'bad guys' and make a nice chunk of change doing it. The US marshals made billions from the sale of seized bitcoins, which goes back into the system to fund the police, army, DEA and other law enforcement agencies. Who in turn spend their time chasing small time drug offenders and perpetuating the circus act that is the war on drugs.

    Personally, i thought it was a great system for buying drugs. It had its flaws, but it took alot of the risk out of buying drugs- purity was higher than street level, if a little more expensive. It also drastically reduced the chance of violence and imprisonment (for a while anyway- but many users remain at large because they were careful). No more getting picked up for an ounce of weed on the way home due to bad timing/luck, just pop by your PO box and pick up an innocent looking package and you are on your way.

    IMO this and legalized retail are the future of narcotics sales. If we abolish the need for anonymity, regulation of sale and quality control are much easier to enforce.
  3. happy_cofee
    Re: silk road when you think it's over....

    I'm not sure I understand. Are they charging bitcoin exchangers as co-conspirators in the silk road case?
    It's like prosecuting the bank for giving me cash to buy weed!
    How much of the silk road activity can be deemed illegal anyway? I mean, unless you were buying something illegal (and bitcoins aren't, right?), the most serious offence involved is tax evasion. Silk Road actually had legal products too (but who really cares about those? lol).
  4. Mick Mouse
    Re: silk road when you think it's over....

    In this case, it would be like the bank giving you money to buy weed, knowing in advance that this what exactly what you were using the money for, and then directing you to they guy who actually has the weed for you to buy, with the understanding that after he sold you the weed, he would deposit the money back in the bank.

    Everybody wins but you.
  5. Isodimorphism
    Re: silk road when you think it's over....

    I'd estimate (purely a ball park figure) that over 99% of Silk Road sales involved breaking some kind of law. There were some listings for legal products, but they typically weren't getting many sales; after all, SR charged a commission and there's a cost involved in converting bitcoins into "real" currency, so there isn't much reason to buy something on the Silk Road when you could buy it on amazon or at a headshop. A lot of the legal products were actually scams (moreso than the illegal ones), so a law was still being broken in those cases.

    Mind you, I've heard there was once a listing for a grilled cheese sandwich. I'd definitely have bought that if I'd had the chance.
  6. Xplicit
    Re: silk road when you think it's over....

    I can't stand to see this, I think SR is extremely important to the drug movement. It is like a big fuck you to these pricks who made drugs illegal in the first place and I honestly love it when they get pissed off and find themselves unable to stop the operation. These DEA and government assholes are getting worst and worst by the day, I honestly hope Silk Road survives and the feds stop going after Bitcoin. Honestly all I can say is fuck the Government and these narcs and the War on Drugs and long live Silk Road.

    Ross Ulbricht is an innocent man in my eyes, yes he may have been responsible for SR but for that he should get a fuckin award. Honestly life in prison for drugs is outrageous, the system is so fucked up. I blame Ronald Reagan, Bush Sr and all their drooling followers for the fucked up system we have, in fact just do away with this shit Government while they are at it. Honestly the Government and the system can kiss my ass.
  7. desert flower
    Re: silk road when you think it's over....

    I think the more pertinent question is will bitcoin survive silkroad?
    Or will it always be "drug currency"?
  8. Alfa
    Re: silk road when you think it's over....

    Paypal has just adopted Bitcoin. Asides from the obvious perversity of that, it seems a safe bet that Bitcoin will survive.
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