BitInstant CEO Charlie Shrem is sentenced to two years prison time, despite asking to be let off free to "change the world."
Bitcoin evangelist Charlie Shrem was sentenced to two years in
prison on Friday after being charged with laundering money through the
notorious online drug bazaar Silk Road.
Shrem pleaded guilty
to one count of aiding and abetting an unlicensed money transmission in
September. After striking this plea deal with the government, Shrem
faced up to six years in prison. However, US District Judge Jed Rakoff
decided two years would be sufficient. The judge denied Shrem's request
to be let off without any prison time so he could "change the world" by
showing he had learned from his mistakes, according to Bloomberg.
"I screwed up," Shrem told the judge in court on Friday, according to
Bloomberg. "The bitcoin community, they're scared and there is no money
laundering going on anymore. They're terrified. 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."
Prosecuting attorney Preet Bharara submitted
a filing to Judge Rakoff on Wednesday urging the judge to sentence
Shrem to prison time.
"The story of this case is not one of
tragedy, but farce," Bharara wrote. "Throughout the year 2012, Charlie
Shrem made a mockery of the anti-money laundering laws."
Shrem, who was the CEO of bitcoin exchange company BitInstant, was arrested in New York in January
in a multi-agency crackdown led by the US Attorney's office, the Drug
Enforcement Administration and the Internal Revenue Service. Another
prominent bitcoin figure, Robert Faiella, was also arrested in the
sting.
According to the agencies, the men engaged in a scheme to sell over
$1 million in bitcoins for use on the now shuttered underground drug
marketplace Silk Road. From December 2011 to October 2013, the agencies
say, Faiella was in charge of a bitcoin exchange on Silk Road called
BTCKing, in which he took users cash, funneled it through Shrem's
company and gave the users bitcoins in return.
Both men were
initially charged with "conspiring to commit money laundering, and
operating an unlicensed money transmitting business." Shrem was also
charged with failing to report suspicious activity in violation of the
Bank Secrecy Act.
Faiella pleaded guilty
to one count of operating an unlicensed money transmitting business and
is still waiting for his sentencing. Ross Ulbricht, the alleged
mastermind behind Silk Road, was arrested in October 2013. He has pleaded not guilty and his trial is scheduled to begin in January.
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