Bitcoin's Charlie Shrem to Forfeit $950K to US Government in Plea Bargain

09/11/2014 10:30

by Joon Ian Wong


Further details have emerged of former BitInstant CEO Charlie Shrem's plea bargain with US authorities, which saw him plead guilty to aiding and abetting an unlicensed money-transmitting business on 4th Sept.

Reuters reported that both Shrem and Robert Faiella, a co-conspirator who pleaded guilty separately, both agreed to forfeit $950,000 to the government as a condition of their deals.


According to the New York Times, Shrem entered his plea in an unwavering voice, appearing stoic and calm a departure from his usually charismatic presence. I knew that what I was doing was wrong. I am pleading guilty because I am guilty, Shrem said in his statement, according to the Times.


Shrem and Faiella's plea bargains provide for jail terms of up to 60 months. The guidelines also include a maximum fine of $250,000 or twice the amount of money derived from the crime or double the loss to the victim, whichever is greatest, the Wall Street Journal reported. The final sentence will be determined on 20th January.


Silk Road outlaws

The Manhattan US Attorney, Preet Bharara, said that Shrem and Faiella sold $1m in bitcoin to 'outlaws' on Silk Road, which bought the convictions for the duo. The plea bargain was struck with Bharara's office.


This development presents a significant reduction in potential prison time for Shrem. Previously, he faced up to 30 years behind bars if found guilty of offences under the Patriot Act, which would have linked him to drug trafficking and terrorism financing.


The current plea bargain is largely in line with Shrem's expectations. He told CoinDesk on 30th August that he would be happy to be moving forward and avoiding a trial as the outlines of the deal took shape. He had previously been under house arrest for seven months.


Key victory

The Wall Street Journal reported Shrem's lawyer Marc Agnifilo as saying that the US government's decision to drop a charge of money-laundering against Shrem is a key victory for the bitcoin entrepreneur. Agnifilo further distanced his client from the activities on Silk Road,  telling Reuters that Shrem was one step more removed from the underground marketplace, which he described as “the heartland of illegal conduct.


Ross Ulbricht, the alleged Silk Road mastermind operating under the alias Dread Pirate Roberts, faces separate charges. On 22nd August, the US government filed new charges of narcotics trafficking, distribution of narcotics by means of the internet and conspiracy to traffic in fraudulent identity documents.


Ulbricht is held in New York's Metropolitan Detention Center as he awaits a trial that will begin on 3rd November. Shrem's lawyer underlined his client's continued commitment to bitcoin, telling the Journal that Shrem would doggedly pursue a career around the cryptocurrency in future. Shrem currently works at Payza, an online payments processor that recently introduced bitcoin transactions.



Charles Shrem, Bitcoin Supporter, Pleads Guilty in Court


[NoteSay what?  Bitcoin (created by Silicon Valley transhumanists, see below), along with a dozen other types of secret international internet currencies, have been connected to human trafficking (including baby and embryo trafficking), prostitution, drugs, money laundering, terrorism, gambling, tax evasion, crime gangs, etc.  I guess Bitcoin, at least, hopes that there are no laws or regulations forthcoming for individuals who want to pay to transfer their brains into computers to fuse with The Singularity and achieve immortality.   See:

--  Bitcoin Weekly 2014 May 7:  First political party to use blockchain for e-voting is from Denmark, The Rise of Digital Currency, Bitcoin's niche in developing economies, at:

--  The Face Behind Bitcoin, at:

--  Mt. Gox Halts All Transactions in New Bitcoin Setback;  Brief Statement Replaces Exchange's Usual Website, at:

--  Welcome to 21st-century Ponzi scheme: Bitcoin, at:

-- Beware of this Insidious New Currency Scam, at:

--  The U.S. government's bitcoin bonanza: How, where and when to sell?, at:  The article first apprared here. - DNI]