Pair admit abetting transfer of bitcoins to rogue website Silk Road

Defendants let digital currency reach website despite knowing most of its deals were illegal

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Charlie Shrem said he knew that much of the business conducted on Silk Road involved the purchase and sale of narcotics.

Published: 10:15pm, 5 Sep 2014Updated: 5:09am, 6 Sep 2014

The top executive of a New York-based bitcoin company and a Florida bitcoin exchanger have pleaded guilty to charges in a US federal court that they enabled the digital currency to be funnelled to the black market website Silk Road.

Charlie Shrem, 24, of Manhattan, pleaded guilty on Thursday in court there to aiding and abetting the operation of an unlicensed money transmitting business, while Robert Faiella, 54, of the southeastern state, pleaded guilty to operating an unlicensed money transfer business.

Sentencing was set for January 20, when each faces as much as five years in prison.

The case grew from the US government's shutdown of Silk Road. Shrem was chief executive officer of BitInstant; Faiella operated an unlicensed money transfer business.

They were accused of letting more than US$1 million in bitcoins reach the website. Both admitted during their pleas that they knew narcotics were bought and sold on the website.

US District Judge Jed Rakoff asked Faiella whether he knew from December 2011 until last October that his bitcoins would be used to buy and sell drugs and that it was illegal.

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Pair admit abetting transfer of bitcoins to rogue website Silk Road

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Defendants let digital currency reach website despite knowing most of its deals were illegal

Defendants let digital currency reach website despite knowing most of its deals were illegal