Bitcoin exchange chief arrested

Charlie Shrem, who became a tycoon at 24 in the virtual currency Bitcoin, was arrested Monday and charged with money laundering in connection with a scheme to sell more than $1 million in bitcoins to people trafficking drugs on the Silk Road website.

Shrem’s arrest at John F. Kennedy International Airport in New York comes less than a year after he raised $1.5 million for his startup, a Bitcoin exchange known as BitInstant, which suspended operations this past summer. Shrem also serves on the board of the Bitcoin Foundation, the closest thing the payment technology has to an official voice.

His arrest stunned the Bitcoin community and marked a setback in the currency’s bid for legitimacy. But federal prosecutors appeared to signal that they have no intention of targeting the currency itself.

— From wire report