for anyone still following the Bitcoin saga, you'll recall that the Silk Road was shut down and its creator imprisoned by the feds just last year. it's the deep web site that sold drugs and weapons and other black market services the vast majority of which were funded by bitcoin transactions.
this week Charlie Shrem was arrested in New York.
Charlie was the founder of Bit Instant which was a website that offered immediate funding of bitcoin accounts for anonymous transaction. federal investigators have tied Bit Instant's employee accounts to the funding of Silk Road virtual wallets. and Charlies site was by far the most prolific provider of cash-bitcoin exchanges in the world. during the Summer of 2013, Bitinstant.com was sustaining an average of 30,000 cash-bitcoin transactions per month.
alleging that Bit Instant was unable to meet demand, money laundering schemes were carried out in partnership with Silk Road accounts to move large amounts of digital currency through high volume sales on the deep web. for an even more entertaining twist, Bit Instant had recently received over a million dollars from the Winklevoss twins investment firm. you know, those 2 guys who say Facebook was their idea.
it wasn't very long ago that Bitcoin and even its most legitimate affiliate services were churning out the newest tech millionaires.
now a handful of the most visible success stories are finding themselves in some seriously hot water.
related article from last year in which Shrem and other 'bitcoin millionaires' talk about their business: