Charlie Shrem, one of the most prominent bitcoin entrepreneurs and a former Bitcoin Foundation vice chairman, denied charges that he tried to launder over USD 1 million in bitcoin in a case tied to the online black market site Silk Road.
Shrem, 24, and Robert Faiella, 52, pleaded not guilty to money laundering charges at a hearing in Manhattan federal court on Tuesday.
They were accused of running schemes for selling bitcoins to users of Silk Road to buy everything from illegal drugs to forged passports. Faiella was also accused of running an underground exchange called “BTCKing”.
The official court documents say that former CEO of BitInstant joined with Robert Faiella to launder money for drug networks on the online bazaar Silk Road.
David Braun, Faiella’s defense attorney, has asked to relocate the trial the federal court in Florida. The U.S. District Judge Jed Rakoff is weighing the request.
“No essential elements of conduct of Mr. Faiella occurred in the Southern District of New York,” Braun said.
At the hearing, Shrem’s lawyer, Marc Agnifilo, told the judge he anticipated to get a “tremendous amount” of electronic evidence— emails, private messages and bank records—from the government. He requested about a month to examine the documents.
This is the latest case, which was brought by Manhattan U.S. Attorney Preet Bharara after a probe of Silk Road marketplace. Another case was tied with the name of Ross William Ulbricht, who was charged in October to running Silk Road under the alias “Dread Pirate Roberts”.
Shrem was arrested at John F. Kennedy International airport in New York on January 27, while Faiella was detained at his home in Florida on January 28.
Aside from his official positions, Shrem has developed a reputation as a high-energy person with a colorful personality. He has been quoted as saying he wouldn’t hire an employee before drinking or smoking pot with the person.
The case has been postponed in the beginning of April as prosecutors needed more time to craft a plea deal. The case was delayed until April 28. Shrem was indicted on April 10.
David Brown and Marc Agnofilo gave no comments after court.
The trial of former Bitcoin Foundation vice chairman Charlie Shrem is now slated to start this September. The allegations could send both men to prison for more than 20 years.