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View Full Version : CEO of Bitcoin Exchange Arrested - Charged with Money Laundering



madfranks
27th January 2014, 10:43 AM
http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1

The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.

Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in bitcoins to Silk Road users, who would then use them to buy drugs and other illicit items.

According to the criminal complaint, Shrem himself bought drugs on Silk Road.

"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 release.

Shrem is a vice chairman at the Bitcoin Foundation. He is listed as a speaker at a Bitcoin conference in Miami that ended Sunday.

Shrem is believed to own a substantial amount of bitcoins.

BitInstant, which is backed by the Winklevoss twins, is currently offline. It was recently the subject of a class-action suit alleging misrepresentation of its services.

The arrest comes on the eve of a two-day state hearing about the future of Bitcoin in New York.

madfranks
27th January 2014, 10:45 AM
It says he's charged with money laundering, but is selling bitcoins to people who then use said bitcoins to buy drugs really money laundering? If I sell an ounce of gold and that person trades the gold for some drugs, is that my fault? WTF!

One more thing, which big bank was it that was found to be laundering money for the Mexican drug cartels? Why hasn't their CEO been arrested yet?

mick silver
27th January 2014, 11:19 AM
i would say he is jewish . i could be wrong ....Currently serving as CEO and co-founder of BitInstant, one of the largest, earliest and well known alternative payment companies, Charlie used his position in both the old banking world and new alternative currency world to help pave the way for the Bitcoin economy to emerge in early 2011. Known in the Bitcoin and old hacker communities as 'Yankee', he is also founding member and current Vice Chairman of the D.C based Bitcoin Foundation. Along with Gareth Nelson, he found the need for a more secure, fast and convenient way of transferring funds between and within payment networks around the wold and leads BitInstant through the complex compliance, licensing and regulations of the worldwide banking system.

Charlie was born, raised, and first incorporated in Brooklyn, NY before traveling the world for business oppurtunities. His consulting positions found him living and visiting countries such as Italy, Israel, Norway, The Netherlands, and Hong Kong and developing a well versed language speaking portfolio which includes English, Hebrew, and Arabic.

Currently residing in New York City after his successful exit from DailyCheckout he consults with dozens of business's to manage their development and success.

Specialties: Bitcoin, finance, economics, actionscript, adobe photoshop, advertising, animation, anti virus, arabic, consulting, customer relations, dreamweaver, electronics, email, english, flash, graphic design, hebrew, html, illustrator, java, javascript, macintosh, macromedia director, marketing, microsoft office, microsoft windows, networking, php, quark, read, reports, sales, search engine optimization, upgrades, web site production, writing, x

mick silver
27th January 2014, 11:23 AM
And the crash is coming and soon, the NSA, FBI and DEA are all monitoring purchases and reporting excess money transfers as laundering or attempts at tax evasion. Oh I forgot, did I mention you need a bank account to buy them...Fred Ehrsam's Overview

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Shami-Amourae
27th January 2014, 11:31 AM
I'm sure all the bankers at HSBC will be arrested for laundering drug money now.
:rolleyes:

Guys, Bitcoin was designed to piss off and eventually destroy governments and banks. No shit they are going to fight this. This is a bloody war for freedom.

madfranks
27th January 2014, 11:54 AM
And the crash is coming and soon, the NSA, FBI and DEA are all monitoring purchases and reporting excess money transfers as laundering or attempts at tax evasion.

Lol, good luck to them, they'll need it. The bitcoin payment system (and all alt-coin derivatives) is a real game changer for them. It's never been easier to send funds anywhere in the world, pretty much instantly with no bank or government oversight.

mick silver
28th January 2014, 07:10 AM
hey mad , i just saw this on bitcoin forum ... There really needs some action, I can't stress this enough, I've paid more money to Bitcoin ATMs, local dealers, exchange websites than I ever did to the fiat bank. tell me madfrank what is all the cost in this ? i am learning and need your help here .

mick silver
28th January 2014, 07:13 AM
Bitcoin is not suitable for 70% of the population (the elderly, computer incompetent folks, people without internet, etc), I hate to say it, but someone needs to create a Bitcoin bank that is non-profit with a very large and qualified team in the board of directors who share a goal for the greater good of Bitcoin. Bitcoin Debit, Bitcoin credit with fees potentially, and etc. Doesn't mean personal wallets won't function the same just to note.

EE_
28th January 2014, 07:32 AM
I'm sure all the bankers at HSBC will be arrested for laundering drug money now.
:rolleyes:

Guys, Bitcoin was designed to piss off and eventually destroy governments and banks. No shit they are going to fight this. This is a bloody war for freedom.


http://www.youtube.com/watch?v=JqKcnYWCAJc

Horn
28th January 2014, 08:11 AM
Guys, Bitcoin was designed to piss off and eventually destroy governments and banks. No shit they are going to fight this. This is a bloody war for freedom.

It receives just as much promotion from .gov as it does penalty, that's what you call a bitch. They are simply riding it to control, while making it look like an attractive "freedom" escape path, all dealers will eventually be forced into require a traceable ip and dogtags. No dark clouds will be permissible. Then you are left trying to convert nothing into their permissible form of tax payment for your "gains".

One of the cardinal rules in the art of war is leaving what appears to be a safe path for your enemy to escape into, there you surround and crush him entirely.

Winklevoss are playing their intended roles.

Son-of-Liberty
28th January 2014, 09:12 AM
hey mad , i just saw this on bitcoin forum ... There really needs some action, I can't stress this enough, I've paid more money to Bitcoin ATMs, local dealers, exchange websites than I ever did to the fiat bank. tell me madfrank what is all the cost in this ? i am learning and need your help here .


Well if the poster is stupid enough to put himself in a position to pay high fees in order to use bitcoin then that is his problem. Anything you do with BTC is on your own terms. Nobody is forcing you to use services which are overpriced or compromise your identity.

One of the reasons I prefer Worldcoin to Bitcoin is that Worldcoin is fast enough to make p2p transactions out in the real world without having to use a 3rd party payment processor. The proponents of Bitcoin say that speed doesn't matter because 3rd party's will handle retail transactions. I say that isn't the direction we should be going. Why trade a costly privacy robbing system we have now for another system with the same problems?

madfranks
28th January 2014, 09:14 AM
hey mad , i just saw this on bitcoin forum ... There really needs some action, I can't stress this enough, I've paid more money to Bitcoin ATMs, local dealers, exchange websites than I ever did to the fiat bank. tell me madfrank what is all the cost in this ? i am learning and need your help here .

It's called the spread. When you go to your coin shop do you expect to get your gold at spot price? There's a fee involved because there's work involved. Banks only offer "free checking" and "free ATMs" because they overwhelmingly make up the difference by loaning your money out at interest!

Come on, everyone here should know this by now.

Son-of-Liberty
28th January 2014, 09:16 AM
I'm sure all the bankers at HSBC will be arrested for laundering drug money now.
:rolleyes:

Guys, Bitcoin was designed to piss off and eventually destroy governments and banks. No shit they are going to fight this. This is a bloody war for freedom.

Yeah we knew that the crack down was going to happen eventually. That's fine, it will just push more USD/BTC transactions into cash and complete anonymity. I keep saying it, Localbitcoins is the way to handle any BTC to fiat trades.

Horn
28th January 2014, 01:18 PM
It's called the spread.

And its centralized into dollar equivalents to determine its real value, not hens or goats.


http://www.youtube.com/watch?v=2VbPFzkLlm8

Son-of-Liberty
28th January 2014, 05:22 PM
And its centralized into dollar equivalents to determine its real value, not hens or goats.


http://www.youtube.com/watch?v=2VbPFzkLlm8

So is oil and gold right now. What's the point? BTC is still very young you can't expect it to function as a completely stand alone currency right out of the gate.

Son-of-Liberty
28th January 2014, 05:24 PM
Apparently the media is making quite the spectacle out of this. I had one person say to me today that the guy who created Bitcoin was arrested for money laundering.....

madfranks
28th January 2014, 07:17 PM
Apparently the media is making quite the spectacle out of this. I had one person say to me today that the guy who created Bitcoin was arrested for money laundering.....

Yeah, I have talked to some co-workers about bitcoin in the past, and today I get an email with the OP link asking me if only me and criminals use it.