Bitcoin entrepreneur and former BitInstant CEO Charlie Shrem hopes to walk free after striking a deal to plead guilty to ‘unlicensed money transmission’ in New York.
For Shrem, it’s the end of seven months of house arrest, restrictions on movement and uncertainty.
The plea bargain is a step down from prosecutors’ original charges and strong statements, which also included money laundering and conspiracy and failing to file suspicious activity reports with government banking authorities, relating to former online black marketplace Silk Road.
Shrem told CoinDesk he had faced a penalty of up to 30 years imprisonment if convicted of the more serious charges under the PATRIOT Act, which would have also tied him to drug trafficking and terrorism financing. He said:
“So, this is a first step of many, but I’m happy to not be going to trial, and moving forward.”
The plea deal does not guarantee his freedom, he said, but he remained confident – no one has yet served jail time for unlicensed money transmission alone.
Shrem said there were no restrictions on his becoming involved with bitcoin-related business once more, and he had immediate plans involving his consulting work with payments company Payza.
“Right now I’m busy with Payza. We’re doing tons of volume with our first rollout and we have many plans. Payza will be the first merchant processor to offer both credit card AND bitcoin processing.”
Shrem said he had other plans but was “keeping them under wraps for now”.
He also plans to travel to Denver in two weeks to attend fellow bitcoin entrepreneur Erik Voorhees’ wedding.
I hope to be partying at @ErikVoorhees wedding next month :) RT @CharlieShrem excellent news to start the weekend! When’s the party?
– Charlie Shrem (@CharlieShrem) 30 Aug 2014
“I was there when he proposed and super happy I’m not missing it,” Shrem added.
White collar crimes
Hearing Shrem’s case is US District Judge Jed S Rakoff. Rakoff recently penned an editorial in the New York Review of Books regretting the difficulties the authorities have faced in successfully prosecuting more serious charges such as fraud, or failing to report suspicious activity, especially with regard to the recent global financial crisis.
Having these charges removed from the list is likely a confidence booster for Shrem.
He was initially arrested in public circumstances at New York’s John F. Kennedy airport on 27th January, as he arrived home from a bitcoin conference in Amsterdam.
He was first unleashed from confinement to his parents’ house in Brooklyn in April, to attend the premiere of documentary ‘The Rise and Rise of Bitcoin’, and also attended a banking industry conference in New York in July to speak about risks banks faced when dealing with bitcoin issues. He led a panel at July’s North American Bitcoin Conference in Chicago via a telepresence robot.
Co-defendant Robert Faiella
According to a court schedule notice released to the public, Shrem’s co-defendant in the case, Robert Faiella of Florida, was also mentioned – but it was not clear whether or not he would also make a deal (or even if one was offered).
Faiella, aka ‘BTCKing’, is accused of selling $1m in bitcoins to drug traffickers and funneling them to Shrem’s BitInstant. Faiella has no prior criminal record.
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