US arrests two Bitcoin exchange operators


The operators of two exchanges for the virtual currency Bitcoin have been arrested in the US.

The Department of Justice said Robert Faiella, known as BTCKing, and Charlie Shrem from have both been charged with money laundering.

The authorities said the pair were engaged in a scheme to sell more than $1m (£603,000) in bitcoins to users of online drug marketplace the Silk Road.

The site was shut down last year and its alleged owner was arrested.

Shrem was arrested on Sunday at New York’s JFK airport. He was expected to appear in court on Monday, prosecutors said.

Faiella was arrested on Monday at his home in Cape Coral, Florida.

Shrem is a founding member and the current vice chairman of the Bitcoin Foundation, a trade group set up to promote Bitcoin as an alternative currency.

Last year, Shrem set up a bar in New York that accepted bitcoins.

BitInstant is one of the largest Bitcoin exchanges on the internet. At the time of publication, the service was inaccessible.

Bitcoin exchanges are services that allow users to trade bitcoins for traditional currencies.


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