In a scene out of a Scorsese film yet to come, self-described “Bitcoin evangelist” Charlie Shrem was arrested at John F. Kennedy International Airport on charges that he schemed to sell more than $1 million in Bitcoins to users of the Silk Road yesterday.Put this arrest right above Dogecoin and Coinye West on the list of reasons why Bitcoin is the Jonah Hill in The Wolf of Wall Street of currency: no matter how much they strive to be taken seriously, the Bitcoin community remains a punch line.Shrem, 24, is the CEO and compliance officer of BitInstant, a Bitcoin exchange company that was charged in a class action lawsuit alleging the company misrepresented exchange times.Shrem is the subject of a recent Vocativ article entitled, “My Night Out With Bitcoin Millionaire and Proud Stoner Charlie Shrem.” The article describes him holding court at his own bar and explaining that he’d never hire anyone he could’t smoke weed with.He says it’s “largely falsified.” His alleged conspirator, Robert M. Faiella, was also arrested today in his hometown of Cape Coral, Fla.

Faiella is “an underground Bitcoin exchanger,” according to a release from the United States Attorney’s Office, Southern District of New York.Faiella, 52, allegedly ran an underground Bitcoin exchange on the Silk Road website from December 2011 to October 2013.He operated under the username BTCKing (it beats Carlos Danger) and sold Bitcoins to users who wanted to buy illegal drugs, the release says.The Silk Road website only accepts Bitcoins as payment.bitcoin legal frameworkFaiella allegedly filled Bitcoin orders through a company based in New York that allowed users to make transactions while remaining anonymous.bitcoin homeland securityShrem was the CEO of that anonymous exchange company, the release from the Attorney’s Office says.bitcoin miner rent

Shrem’s other company, BitInstant, isn’t named in the release, which simply refers to the entity performing the anonymous exchanges as “the Company.” BitInstant’s website is currently down.Shrem was the anonymous exchange company’s CEO and, from August 2011 through July 2013, when the company ceased operating, he was also its compliance officer, the release says.The release also says Mr.Shrem personally bought drugs on Silk Road, so he was fully aware that it was a drug trafficking website.is bitcoin income taxableThe Attorney’s Office is charging that Mr.bitcoin blockchain virusFaiella in the exchanges and failed to file a single suspicious activity report with the U.S.cost of litecoin miningTreasury Department, as he was required to do as the Company’s compliance officer.bitcoin dice casino

Faiella stopped dealing with the Company when it stopped accepting cash payments in late 2012, the release says.He allegedly shut down his Silk Road business for a while, then resumed operation in April 2013 without the Company’s assistance and continued exchanging tens of thousands of dollars a week in Bitcoins until the Silk Road website was shut down by law enforcement in October 2013.Each man is being charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.pb mining bitcoinShrem is also being charged with one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison.ethereum download blockchain

The investigation is ongoing, and the prosecution is being handled by the U.S.Attorney’s Office’s Complex Frauds Unit.This doesn’t bode well for Bitcoin, which is already having trouble being accepted by larger financial institutions.It’s already got a reputation of being used for illegal drug transactions.That one of its high profile “evangelists” would be charged with using it for just that purpose won’t do much to persuade detractors that the currency is legitimate.UPDATE 2:17 P.M.: Bitcoin enthusiasts and BitInstant investors Cameron and Tyler Winklevoss of Winklevoss Capital (and, duh, The Social Network fictional infamy) have released a statement about yesterday’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.Although BitInstant is not named in today’s indictment of Charlie Shrem, we are obviously deeply concerned about his arrest.

We were passive investors in BitInstant and will do everything we can to help law enforcement officials.We fully support any and all governmental efforts to ensure that money laundering requirements are enforced, and look forward to clearer regulation being implemented on the purchase and sale of bitcoins.”The CEO of a bitcoin exchange was arrested at New York's JFK airport today in a multi-agency crackdown involving the Internal Revenue Service, the Drug Enforcement Agency, and the US Attorney’s office.Charlie Shrem, 24, is accused of engaging in a money laundering scheme with a user on the Silk Road website that helped narcotic traffickers clean their funds.Shrem now faces up to 30 years in prison for three charges.Robert Faiella, a 52-year-old user on the site who went by the name “BTCKing,” was also charged and faces 25 years in prison.He was arrested in his hometown in South Florida.According to the Justice Department, both Shrem and Faiella are charged with conspiring to commit money laundering and operating an unlicensed money-transmitting business.

In addition, Shrem is charged with violating the Bank Secrecy Act for willfully failing to report Faiella's suspicious activity.Bitinstant, the site Shrem headed, aimed to be a leader in the market for selling and buying Bitcoins.It had received $1.5 million dollar in seed funding led by the Winklevoss brothers, made famous during their court battles with Mark Zuckerberg over the founding of Facebook.“As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 Million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road,” read a statement issued by Manhattan US Attorney Preet Bharara.“We will aggressively pursue those who would co-opt new forms of currency for illicit purposes.”The crackdown is nothing new.Users of and those affiliated with the Silk Road, the deep-web site infamous for its anonymous drug market, have incurred a host of high-profile arrests recently.In December, three moderators from the site were arrested and charged with conspiracy to engage in narcotics trafficking, computer hacking, and money laundering.