Jail term for Silk Road bitcoin deals

Bitcoin trader Charlie Shrem has been sentenced to two years in jail for indirectly helping people swap cash for bitcoins on the Silk Road marketplace.

The Silk Road shut down in 2013 following raids by the FBI and other law enforcement agencies which said it was trading in illegal drugs.

Shrem was caught in the Silk Road raids for trading a total of $1m (£640,000) for bitcoins used on the site.

His sentence also includes forfeiting $950,000 (£608,000) to the US government.

Shrem was not directly involved with the Silk Road but was charged because of his association with Robert Faiella who set up an exchange that let the marketplace’s customers swap cash for bitcoins. The virtual cash was the only form of currency accepted on the Silk Road.

Bitcoins are a virtual currency built around a complicated cryptographic protocol and a global network of computers that oversee and verify which coins have been spent by whom.

The Judge who handed down the sentence said Shrem was not “some kid making a one-time mistake” but had “excitedly” helped Faiella get access to bitcoins. Faiella is due to be sentenced in late January. He has pleaded guilty to running an unlicensed money transmitting business.

Read the Full Article: Source – BBC News

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