The ongoing saga of The Silk Road investigation and the trial of its alleged founder Ross Ulbricht gets more interesting as we learn that there's a Winklevoss connection. The much despised twin brothers apparently put up $1.5 million to fund a startup called Bitinstant, the sole purpose of which appears to have been to launder drug money through Silk Road.
Bitinstant founder and CEO Charlie Shrem was arrested on federal money laundering charges. A federal prosecutor says Shrem is accused of selling "over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road," and that the government will continue to "aggressively pursue those who would coopt new forms of currency for illicit purposes." Bitinstant appears to have been shut down completely.
In May of last year, when they made their investment in Bitinterest, Cameron Winklevoss had this to say to TechCrunch about Shrem:
"Charlie has been in the space for a very long time, and he has an impeccable reputation among Bitcoiners. He knows everyone in the space and everyone in the space knows him. One of the most exciting things about people who are into Bitcoin is that they’re a really passionate community, and Charlie is a passionate entrepreneur. He would be in that category of someone who lives, breathes, and sleeps Bitcoin."
Well, he apparently lived and breathed some other things, too, and prosecutors say that Shrem also personally bought drugs from Silk Road himself.
Anyway, more bad PR for the Winklevosses. Sadface. (Not really.)
Also, P.S. as of last spring they were estimated to own 1 percent of all the Bitcoin in existence, so they can probably afford this measly $1.5 million loss.