Bitcoin founder to plead guilty to US federal charges

A prominent supporter of bitcoin, Charles Shrem, says he will plead guilty on Thursday to resolve federal charges that he helped smooth the way for drug transactions on the online marketplace Silk Road.

He is to plead in New York federal court to one count of aiding and abetting the operation of an unlicensed money-transmitting business.

Mr Shrem, one of the most vocal advocates of bitcoin, was accused in January of using his company to convert dollars into bitcoin for users of Silk Road, the now-defunct bazaar known for its wide selection of narcotics and drug paraphernalia. He is a founding member of the Bitcoin Foundation's board and a co-founder and former chief executive of the company BitInstant.

Federal prosecutors contended that he operated the scheme in co-operation with Robert Faiella, known as BTCKing, who was also arrested in January, in Florida.

“They want a guilty plea on their books, and that’s what they’re going to get,” Mr Shrem said on Saturday from his parents’ home. Bitcoin continues to grapple with the perception that the digital currency provides an anonymous way to engage in illegal activity. – (Copyright New York Times 2014)