attorney in the Southern District of New York said Shrem helped someone he hadn't met in person, Robert Faiella, sell more than $1 million worth of bitcoins to Silk Road customers.Faiella, a 52-year-old Florida man, allegedly ran an underground Bitcoin exchange using the alias BTCKing.Shrem was arrested at John F. Kennedy International Airport in New York on Sunday, and Faiella was arrested at his home in Cape Coral, Fla., on Monday, prosecutors said.Both are charged with conspiracy to launder money and operating an unlicensed money transmitting business.Additionally, Shrem faces a charge for not tipping off the feds to what was allegedly going on.Shrem, 24, is a major player in the Bitcoin world.The BitInstant exchange, based in New York City, lets people buy bitcoins locally at more than 700,000 locations in the United States, as well as Brazil, Russia and elsewhere.It received a $1.5 million investment last year from Cameron and Tyler Winklevoss.Shrem is also vice chairman of the Bitcoin Foundation, one of the currency's biggest advocates.

The Winklevoss twins said in an emailed statement that they are "deeply concerned" about Shrem's arrest."When we invested in BitInstant in the fall of 2012, its management made a commitment to us that they would abide by all applicable laws - including money laundering laws - and we expected nothing less," they said.According to the criminal complaint filed in federal court, Faiella first appeared on Silk Road as BTCKing in late 2011.The black market website only let people buy and sell goods with bitcoins, and Faiella made a business of exchanging cash for bitcoins.That's where Shrem's bitcoin exchange came in handy.Shrem sold Faiella the bitcoins that eventually made their way to drug buyers and sellers, according to an investigation by the Internal Revenue Service.Though Shrem knew where the money ultimately ended up, he never reported it to the Treasury Department, according to the U.S.Federal documents cite email exchanges between Shrem and Faiella that show how close they worked together.

Although Shrem never knew Faiella by his actual name -- only by BTCKing -- the young executive helped the older man avoid trouble.For example, when Faiella's frequent and large cash deposits raised eyebrows at a cash processing company, Shrem advised Faiella on how to avoid sounding alarms.The IRS claims the partners exchanged $1.05 million in bitcoins over a 10-month period ending in October 2012.Faiella eventually ended the partnership with Shrem.By 2013, he was exchanging more than $20,000 a week for Silk Road clients.To gather evidence against Shrem and Faiella, federal agents posed as Silk Road users and bought bitcoins from Faiella.According to the court documents, agents then traced the money they paid, which led them to Faiella and eventually Shrem.Monday's news is the latest in the Silk Road bust that began in October with the arrest of the website's alleged founder.Federal agents managed to track down the website's server, which housed transaction information and private messages.

Some of that information was used as part of the Shrem and Faiella arrests.bitcoin ssl certificateBitInstant's website was down Monday after the announcement by federal law enforcement.bitcoin meetup nycSeveral lawmakers have called for increased regulation of Bitcoin in light of the currency's heightened privacy, given that they can be traded without using names and are difficult to trace to an individuals.bitcoin miner dragonDuring an interview with Russian media news group RT last year, Shrem called the current financial regulations "crazy."bitcoin rbi"They're throwing me under the bus," he said of the U.S.quotazione bitcoin

"They don't like us."Cyber robbers have mugged Hong Kong’s Bitfinex bitcoin exchange, stealing nearly 120,000 bitcoins worth up to $72 million.cnbc bitcoin quoteZane Tackett, Director of Community & Product Development for Bitfinex, told Reuters on Wednesday that 119,756 bitcoins had been stolen from users’ accounts and that the exchange hadn’t yet decided how to address customer losses.bitcoin wallets countBitfinex halted all trading on Tuesday, stopping deposits and withdrawals while it investigates the breach.bitcointalk speculationThe exchange said in a blog post that what it knew as of Tuesday was that some users have had bitcoins stolen.pool bitcoin mining calculatorAt the time of the post, part of the investigation was figuring out who, exactly, those users were.

Bitfinex said that it may need to settle open margin positions, associated financing, and/or collateral affected by the breach as it accounts for individual customers’ losses.The settlement prices will be at the market prices current as of Tuesday, 18:00 UTC.Bitfinex confirmed that the breach was confined to bitcoin wallets.Other digital tokens traded on the exchange weren’t affected.The one question on everybody’s lips: Are we getting Goxed again?That, after all, has been, to date, the Mother of All Bitcoin Bellyups.Gox, a Tokyo bitcoin exchange, made a “whoopsie-doo!”announcement in 2014 concerning the mysterious vanishing of half a billion dollars worth of digital assets.Various theories have been floated about what happened to those slippery slips of currency code.Some pointed to Mt.Gox being an insider job.The Japanese newspaper Yomiuri Shimbun reported on New Year’s day, 2015, that there was “strong suspicion” that most of the missing bitcoins were ripped off by insiders.

Yomiuri Shimbun claimed that the loss of about 7000BTC could be explained by cyberattack – in other words, crooks outside the company’s network were the perpetrators – but that there’s no evidence of cyberattack around the loss of the remaining 643,000BTC.In short, it thinks that 99% of the crime was an inside job.According to WizSec, a bitcoin security outfit, the latest evidence, presented in April 2015, points to “most or all of the missing bitcoins [having been] stolen straight out of the MtGox hot wallet over time, beginning in late 2011.” At any rate, a Bloomberg Technology reporter based in Tokyo who’s familiar with the hack and subsequent collapse of Mt.Gox said that the Bitfinex theft feels “a little different” so far.Bitfinex is the largest US dollar trading exchange in the world, according to Yuji Nakamura – at least, it has been over the past 30 days.Based in Hong Kong, it’s dominated by the Yuan.The theft dragged the exchange down 20%, though Bloomberg reported that those losses had been erased as of Wednesday.

So yes, that’s similar to what we saw 2 years ago with Mt.Gox, which was then the largest exchange in the world.First there was the report of a hack, then it went bankrupt.The difference this time around is that Bitfinex has been transparent about the loss, Nakamura said.Users haven’t been left in the dark a la Mt.Rather, Bitfinex has been talking to users about the incident on social media, pushing out information “as it becomes available” on Reddit and on its status page.As of Wednesday evening, Bitfinex said it was continuing to investigate and that it’s cooperating with authorities.It’s also working with blockchain analytic companies to track the stolen bitcoins.Meanwhile, it’s working on getting the platform up and running on a secure instance so that users can log in and see if their accounts have been affected, as well as the state of their positions and orders.It told users that it would post more information later in the day, UTC time.Hopefully, this time it’s a limited hack and won’t bring down the entire exchange, Nakamura said.