The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.
Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in bitcoins to Silk Road users, who would then use them to buy drugs and other illicit items.
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.
BitInstant, which is backed by the Winklevoss twins, is currently offline. It was recently the subject of a class-action suit alleging misrepresentation of its services.
The arrest comes on the eve of a two-day state hearing about the future of Bitcoin in New York.
Here's the full release from the Justice Department. An embed of the full criminal complaint follows.
