Wednesday, January 29, 2014

Bitcoin Community Taken Aback By Arrest of BitInstant CEO Charlie Shrem

This morning, the Bitcoin community was rocked by the news that a vaunted start-up CEO had been arrested for money laundering. BitInstant CEO Charlie Shrem, 24, has been the subject of fawning profiles for his Bitcoin entrepreneurship. Bloomberg introduced him to the world as a Bitcoin millionaire last year. When Tyler and Cameron Winklevoss invested $1.5 million in his company, they made specific reference to his “impeccable reputation.” On Monday, that reputation took a big hit when the feds arrested him at JFK airport in New York, alleging that he helped a man in Florida convert over a million dollars worth of Bitcoin for use on the drug bazaar Silk Road.

BitInstant which was in operation from 2011 to 2013, before shutting down “temporarily” in July, was a site that allowed users to buy and sell Bitcoin. People in the Bitcoin community were shocked by the news. There has been a divide in the Bitcoin world between the digital coin’s dark side as a tool for assassination websites and online drug bazaars, and its light side as a “payment disrupter” that attracted legitimate entrepreneurs and venture capitalists eager to capitalize on the Internet’s hottest new innovation. Linking Shrem, who holds a high-profile ‘light side’ position as vice chairman of the Bitcoin Foundation, with BTCKing, who was in touch with the Silk Road’s Dread Pirate Roberts and running an anonymous Bitcoin exchange on the drug bazaar, pulls that divide down


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