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Bitcoin Foundation’s Shrem Will Plead Guilty, Lawyer Says

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Former Bitcoin Foundation Vice-Chair Charlie Shrem
Charlie Shrem attends Tribeca Talks: 'The Rise and Rise Of Bitcoin' during the 2014 Tribeca Film Festival at the SVA Theater in New York City, on April 23, 2014. Photographer: Astrid Stawiarz/Getty Images for the 2014 Tribeca Film Festival

Aug. 30 (Bloomberg) -- Charlie Shrem, the former Bitcoin Foundation Inc. vice chairman, will plead guilty to unlicensed money transmission under an agreement with federal prosecutors, his lawyer said.

Shrem was accused in an indictment of trying to launder more than $1 million in the virtual currency in a case tied to the illicit online bazaar Silk Road. He was indicted in April on charges of money laundering conspiracy, failing to file reports of suspicious business activity and operating an unlicensed money transmission business in a scheme to sell Bitcoins to Silk Road users to buy illegal drugs.

Shrem pleaded not guilty to the charges that month.

Marc Agnifilo, his attorney, said yesterday in an e-mail that Shrem will change his plea at a hearing in Manhattan federal court on Sept. 4. Silk Road, a sprawling and anonymous black-market bazaar, was shut down by federal authorities last year.

Shrem, who was also the chief executive officer of a Bitcoin exchange company called BitInstant, and co-defendant Robert Faiella, who the U.S. said operated an underground Bitcoin exchange called BTCKing, were first arrested in January. Faiella faces as long as 20 years in prison if convicted of the most serious charge of conspiracy.

James Margolin, a spokesman for Manhattan U.S. Attorney Preet Bharara, declined to comment on the plea in an e-mailed statement.

The change of plea was reported earlier by Reuters.

The case is U.S. v. Faiella, 14-cr-00243, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Karen Gullo in federal court in San Francisco at

To contact the editors responsible for this story: Michael Hytha at Stephen West

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