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According to the criminal complaint, Shrem himself bought drugs on Silk Road.

"Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way," DEA agent James Hunt said in a release.

Shrem is a vice chairman at the Bitcoin Foundation. He is listed as a speaker at a Bitcoin conference in Miami that ended Sunday.

Shrem is believed to own a substantial amount of bitcoins.

http://www.businessinsider.com/report-c ... ted-2014-1

This should make for an interesting case. I believe one of the big selling points of Bitcoin was its anonymity. But it seems like there is an expectation by the Federal government that Bitcoin is to be treated as a bonifide currency complete with "suspicious activity" reporting requirements. One unintended outcome of this case could be the increased legitimacy of Bitcoin as an internationally recognized currency.

This case seems a little thin at first blush as well as a good example of selective prosecution. How many U.S. banks "knowingly" hold accounts for mafia front businesses? If I was the defense attorney I'd take every chance to compare Bitcoin to the U.S. dollar and other sovereign currencies.

The article also states that Shrem, himself, purchased drugs from silk road. I think he's got a lot of trouble ahead of him.

cupronickel wrote:The article also states that Shrem, himself, purchased drugs from silk road. I think he's got a lot of trouble ahead of him.

He probably has gazillions of dollars and he does a rookie thing like buying drugs like the plebes would? Keith Richards laughs at him.

cupronickel wrote:The article also states that Shrem, himself, purchased drugs from silk road. I think he's got a lot of trouble ahead of him.

He's not being charged for buying or possessing drugs, at least not yet. However, I agree it was a dumb move in that Shrem will not be able to claim ignorance.

"Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way," DEA agent James Hunt said in a release."

A lot of hyperbole here. The Feds appear to be getting a lot of milage out of Shrem simply selling the Silk Road organization about 1 million in Bitcoin. Do these people have any bank accounts? If so why aren't the banks being charged?

Based on this news I decided to liquidate my bitcoin. The US.gov is going to crack down further on BTC in the future, eventually destroying its value.

The USD exchange I use, Coinbase.com recently instituted $3,000/day sell limits, making any chance of whopper profits down the line a joke. When I went to sell $3,000 worth this morning, a lower sell limit of 3 BTC/day popped up unexpectedly, limiting me further. I got out less than $2500 today, will get the rest out tomorrow.

IdahoCopper wrote:Based on this news I decided to liquidate my bitcoin. The US.gov is going to crack down further on BTC in the future, eventually destroying its value.

The USD exchange I use, Coinbase.com recently instituted $3,000/day sell limits, making any chance of whopper profits down the line a joke. When I went to sell $3,000 worth this morning, a lower sell limit of 3 BTC/day popped up unexpectedly, limiting me further. I got out less than $2500 today, will get the rest out tomorrow.

I can't blame you there, especially if you have some nice capital gains.

You are right that this could be the beginning of the end for Bitcoin. However it is also possible that the publicity from a case like this could help Bitcoin into the mainstream. The Feds have brought what appears to a thin, sloppy case against a currency that they barely understand. Federal prosecutors will get convictions in about 95% of their cases, but here, with distrust of government at or near all-time highs, they may have bitten into a buzzsaw.