BitInstant CEO Charlie Shrem has today been released on bail following a court appearance.
Shrem appeared before the US District Court in Manhattan this morning, walking out shortly after on a $1m bond.
Shrem is anything but a free man at this point. Under the terms of the bail agreement, he will remain confined to his parents' home in Brooklyn. Assistant US attorney Serrin Turner opposed bail, arguing that Shrem has a strong incentive to flee and the resources to do so. Shrem's net worth, which was brought up during the bail hearing, stands at $6m, The Daily Mail reports.
Shrem's lawyer Keith Miller insists that the allegations in the US Attorney's Office complain are "simply allegations" and that Shrem is presumed innocent, which goes without saying. However, Miller did not divulge much more than that.
It is highly unlikely that Shrem will make any statements, either, as they could hurt his case or possibly even violate the terms of his bail agreement.
"We expected nothing less," the brothers said in a statement, adding that they are deeply concerned by the arrest. The duo were eager to clarify their role as passive investors in BitInstant, adding that they will do everything they can to assist law enforcement officials.
Although Shrem was granted bail, this should not be taken as a sign of weakness on the part of the prosecutors. All in all, the bond is huge and it's clear that the US Attorney's Office considers him a flight risk.
The charges are very serious indeed. Shrem is not charged with simply facilitating money laundering through his exchange, but with having explicit knowledge of the dealings involving Robert Faiella, who sold more than $1m worth of bitcoins to Silk Road users.
Shrem appears to be unwilling to comment the allegations, along with Faiella.
The bitcoin community appears to be divided by the news. While some are hailing Shrem as a martyr figure and a victim of overzealous regulators, others are happy to see the back of him – arguing that such shady practices are giving bitcoin a bad name.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.