Feeds

Accused fraudster Charles Shrem quits Bitcoin Foundation board

'Prolonged legal dispute' just wouldn't look good

Internet Security Threat Report 2014

Charlie Shrem, the 24-year-old Bitcoin entrepreneur who was arrested on Monday on money-laundering charges, has resigned from his position as vice chairman of the board of the Bitcoin Foundation.

Authorities scooped up Shrem at New York City's JFK Airport on claims that he and accomplice Robert Faiella were involved in processing some $1m (£600,000) of Bitcoin payments for the online drugs marketplace Silk Road.

Shrem is further accused of failing to report the payments as suspicious activity, as was his duty under the Bank Secrecy Act as compliance officer for Bitcoin startup BitInstant, which he founded.

In a statement issued on Tuesday, the Bitcoin Foundation said Shrem and the other board members had mutually agreed that he would step down from his role, effective immediately.

"While Charlie has contributed a great deal of personal effort and resources to enhance the adoption of Bitcoin worldwide, a prolonged legal dispute would inevitably detract from advancing that core mission," said Jon Matonis, the board's executive director.

The incident is only the latest setback for the Bitcoin Foundation, which was launched in 2012 with the aim of cleaning up Bitcoin's "undeserved reputation stirred by ignorance and inaccurate reporting."

The Foundation's activities have seemingly done little to stem the tide of negative press from the oft-murky Bitcoin economy, however, with the closure of Silk Road and the subsequent seizure by authorities of $28m worth of Bitcoins being perhaps the most publicized example.

In its statement, the Foundation said it was "both surprised and saddened" to learn of the charges against Shrem, but added that they do not represent an indictment of Bitcoin or its community.

"The foundation does not condone illegal activities and values transparency, accountability and a high level of responsibility towards its members and overall community," the statement said. ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.