The founder of a prominent Bitcoin exchange company has been arrested and charged with running an illegal scheme to sell the digital currency to customers trafficking narcotics on the now-defunct drug website Silk Road, prosecutors said Monday.
Charlie Shrem, 24, chief executive of BitInstant, was arrested Sunday at John F. Kennedy International Airport in New York on charges of conspiring to commit money laundering and operating an unlicensed money transmitting business, prosecutors said. He is scheduled to appear in court on Monday.
Robert Faiella, an underground Bitcoin exchanger, faces the same charges for allegedly obtaining Bitcoins with help from Shrem's company and then selling the digital currency to users of Silk Road, which only accepts Bitcoin as payment.
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