Bitcoin trader Charlie Shrem has been sent to jail for two years after indirectly helping people to swap cash for bitcoins via the Silk Road marketplace. The Silk Road was closed in 2013 after raid by the FBI and other agencies that claimed it was trading in illegal drugs. Shrem was caught in the raids and accused of trading $1 million for bitcoins used on the site. He has been told to forfeit $950,000 to the US government.
Although Shrem wasn’t directly involved with the Silk Road, he was charged due to his association with Robert Faiella, who had set up a service allowing people to trade in cash for bitcoins. Bitcoins are a virtual currency overseen by a global network of computers. Shrem was accused of enabling Faiella to access bitcoins Faiella is to be sentenced next month after pleading guilty to running an unlicensed money transmitting business.
Shrem’s lawyers said he was motivated by his interest in bitcoins as opposed to the Silk Road. Government lawyers were lobbying for him to spend 57 months in jail. Silk Road operator Ross Ulbricht has pled not guilty to dealing in drugs and conspiracy. He is due to face trial next month.
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