Charlie Shrem Sentenced to 2-Years for Silk Road Money Laundering

Bitcoin entrepreneur Charlie Shrem was sentenced for two years in prison after being accused of illegal activities on Silk Road marketplace.

Photo: Ray/Flickr

Photo: Ray/Flickr

American entrepreneur and member of the Bitcoin Foundation founding board, Charlie Shrem, was sentenced to two years in prison yesterday, including three years of supervised release.

Shrem was arrested in Manhattan in January this year, following accusations of illegally selling more than $1 million in digital currency on now defunct black marketplace Silk Road.

Shrem was pleaded guilty to charges of facilitating the operation of an unlicensed money transferring business.

Yesterday, in Manhattan Federal Court, Shrem told U.S. District Judge Jed Rakoff, that he wanted to be free to ensure that other people do not commit crimes with the use of bitcoin.

“I screwed up. The bitcoin community, they’re scared and there is no money laundering going on any more. They’re terrified,” he said. “Bitcoin is my baby, it’s my whole world and my whole life, it’s what I was put on this earth to do. I need to be out there. If your honor grants me that, I can be out there in the world, making sure that people don’t do the same stupid things that I did.”

“I have no excuses for what I did. I broke the law and I broke it badly,” he also said.”

U.S. District Judge Jed S. Rakoff rejected his bid to remain free. The judge, who also obliged Shrem to pay around $1 million, said the crime committed is too serious.

“There’s no question that Mr. Shrem, over a period of many months, was knowingly, willfully, to some extent excitedly and even passionately involved in activities he knew were, in part, involved in serious violations of the law,” the judge stated.

In September, Shrem told the court that for a period in 2012, his company, BitInstant, aided Robert Faiella, the BTCKing exchange operator, to process bitcoins that were then used for purchasing and selling drugs on the shutdown Silk Road.

Shrem and Faiella were both charged in April with money laundering on Silk Road and a trial was planned to commence this month.

Faiella was pleaded guilty to operating an illegal money business and is currently awaiting sentencing. He will be sentenced on January 20.

“Justice has been served. They were trying to put me away for more than six years, which would have been unfair. I think it turned out alright,” Shrem said after leaving the court.

Shrem also announced the sentence through his twitter account and added he was allowed to self-surrender in 90 days.

“Considering I was facing 30 years, justice has been served,” he wrote. “On a good note, Judge Rakoff called me a brilliant visionary and that he admires my brainpower.”

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