Charlie Shrem Reaches Plea Deal

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Bitcoin entrepreneur Charlie Shrem has reached a plea deal to settle US charges that he was involved in a plan to sell over $1m of bitcoins to users of online marketplace Silk Road. Schrem will plead guilty on Thursday in New York federal court to the charges of unlicensed money transmission, his lawyer Marc Agnifilo told Reuters in an email. Prior to his arrest, Shrem was working as the vice chairman of the Bitcoin Foundation and CEO of bitcoin exchange BitInstant. He has been involved with bitcoin since 2011, and is one of the community’s biggest names.

Before the plea deal was struck, Prosecutors were pursuing Shrem for charges of operating an unlicensed money transmitting business, failing to file suspicious activity reports with government banking authorities and money laundering conspiracy. Silk Road is an anonymous online marketplace used to buy and sell illegal products using bitcoins. It was hosted as a Tor hidden service, meaning that users could browse without having their movements traced. The original site was launched in February 2011 and shut down in October 2013 by federal authorities, though a new website and several copycats have since been launched.

Shrem is not the only high-profile arrest to be made with regards to Silk Road. Federal authorities are still pursuing charges against Ross William Ulbricht, who is purported to be the founder and administrator of Silk Road. Ulbricht faces charges of money laundering, computer hacking and conspiracy to traffic narcotics, among others. Ulbricht intends to plead not guilty and fight the charges.

This spate of high-profile arrests have sparked a discussion about the legal and regulatory aspects of the bitcoin economy. Critics of the currency believe that its anonymous nature makes it prone to misuse and support regulation, whereas cryptocurrency enthusiasts fear the stifling effects of strict regulation. The outcome of the silk road rulings will likely set the tone for some of the bitcoin regulation being drafted in the near future.

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