Bitcoin is something I don’t understand and I’ve never met anyone who can explain it in a way that convinces me that they understand it.
Next Monday, Charlie Shrem, vice chairman of the Bitcoin Foundation and a founding member of the organisation, appears in court in New York charged with money laundering.
Shrem and a colleague who was arrested at the same time as Shrem sold a million dollars worth of Bitcoins to an online drug site called Silk Road to allow the site’s users to buy drugs anonymously.
Meanwhile the man alleged to be the founder of Silk Road is expected to plead not guilty in New York tomorrow on charges of drug trafficking, computer hacking, money laundering and other offences. He is the 29 year-old Ross William Ulbricht.
Ulbricht is said to have run the site under the name Dread Pirate Roberts. Drugs sold through Silk Road included cannabis, psychedelic substances and stimulants. The deals were done in Bitcoins.
A virtual currency which permits untraceable transactions is, of course, a great facilitator of money laundering, and a great way to pay for criminal transactions.
The US Drug Enforcement Agency said: “Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way. Drug law enforcement’s job is to investigate and identify those who abet the illicit drug trade at all levels of production and distribution, including those lining their own pockets by feigning ignorance of any wrong doing and turning a blind eye.”
Bitcoin’s value first hit $1 in Q1 2011. Last year it went from $13 to over $1,100 before dropping back to $700.
Who needs this thing?