CEO of Bitcoin exchange arrested in ‘Silk Road’ drug prosecution

By Staff The Associated Press

Posted January 27, 2014 1:06 pm

Updated January 31, 2014 10:38 am

1 min read

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Bitcoin, a digital currency, is gaining wider acceptance among investors as a reliably tradable form of money. Getty Images

NEW YORK – U.S. prosecutors say two men are charged with conspiring to commit money laundering by selling more than $1 million in Bitcoins to users of the black market website Silk Road, which lets users buy illegal drugs anonymously.

Authorities say Charlie Shrem – CEO of Bitcoin exchange BitInstant – was arrested Sunday at New York’s Kennedy Airport while Robert Faiella was arrested Monday at his Florida home.

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Prosecutors say in a news release that Faiella sold Bitcoins to users seeking to buy illegal drugs on the site.

They say Shrem bought drugs on Silk Road and helped Faiella exchange more than $1 million in cash for Bitcoins so they could make illegal purchases.

It wasn’t immediately clear who would represent Faiella and Shrem in court.

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