Jewish Journal

Illegal? Just a bit(coin)

by Jared Sichel

January 27, 2014 | 4:25 pm

Shrem leaving the Manhattan Federal Courthouse on Monday.

It seems that reality imitates Hollywood. Fresh off two films that made Jews inaccurately appear more materialistic and valueless than the rest of American culture ("American Hustle" and "Wolf of Wall Street"), Charlie Shrem, a Yeshiva of Flatbush alum, was arrested Sunday on four federal counts related to his now-defunct Bitcoin transaction company, Bitinstant.

Bitcoins are a relatively new type of virtual currency. If you have no idea what Bitcoins are, join the club. Neither did I until 4:00 p.m. PT Monday. Here's a good guide. Shrem's company, Bitinstant, allowed people to burchase Bitcoins with traditional currency. Because Bitcoins don't leave an identifying "fingerprint," they are gaining popularity amongst drug traffickers. Going through banks, credit cards, etc. makes it easier for the Feds to track you. With Bitcoin, it's far more difficult. And it's that element of Bitcoin that Shrem allegedly profited off of.

The three charges, in layman's terms, are:

1. Running a company that knowlingly assisted drug dealers conceal their financial transactions.

2. Actively assisting another shady character (Robert M. Faiella, AKA "BTCKing"), who would resell Bitcoins on Silk Road, the online black market recently busted by the FBI.

3. Not reporting Faiella's suspicious requests from Bitinstant.

However untangible the new currency is, these charges are anything but. Shrem could be facing serious jail time.

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Jared is a staff reporter for the Jewish Journal. Raised in North Potomac, MD, a sleepy suburb 30 minutes outside Washington D.C., Jared attended Tulane University in America’s...

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