Bitcoin Scandal

Charlie Shem may face up to 25 years in prison if found guilty of several money laundering charges that were filed against him recently.

Who is Charlie Shem?

Charlie Shem is one of the “faces” of Bitcoin, a millionaire who has made his fortune off the digital currency. Shem, only 24, had begun investing in bitcoin his senior year at Brooklyn College when Bitcoins were only a mere $3 to $4 each. The cost of a single Bitcoin now is $800. Shem found his true success through a Bitcoin payments company that he helped to create, BitInstant.

Bitcoin

For those who are unfamiliar with the term “Bitcoin”, it can simply be described as a digital form of currency that has a somewhat unstable value. The value of Bitcoin can fluctuate overnight by 20% in some cases. Bitcoin was developed only a few years ago in 2009 by software creator Satoshi Nakamoto.

You could view Bitcoin as a type of PayPal. A means to paying someone online. The popularity of Bitcoin has grown substantially in a short amount of time to where Bitcoin ATMs have begun to sprout up.

One of the major concerns about Bitcoin is the cyber security surrounding Bitcoin. A lot of people are concerned as to how safe a digital currency can really be. This is the leading cause of hesitation for most.

The Scandal

Charlie Shem, who has never been arrested or in trouble, was approached by IRS agents and agents from the Drug Enforcement Agency after landing at an airport returning home from Amsterdam where he was a speaker at an e-commerce convention.

Shem seemed surprised by the arrest and assumed it was Bitcoin related. The charges brought against him were one count of failure to file a suspicious activity report, conspiracy to commit money laundering and one count of operating an unlicensed money transmitter. Shem’s bond was set at $1 million. As a result of the charges Shem stepped down as vice chairman of the Bitcoin Foundation which is the trade group that is viewed as the official voice of the Bitcoin Movement.

Shem has since reached out to the Bitcoin community and past colleagues for help regarding his upcoming trial asking for donations in the form of Bitcoin to help pay for his legal expenses.

Summary

The future of Charlie Shem is uncertain and some would say the same about Bitcoin. But with the growth and popularity of Bitcoin everyday it’s hard to imagine that Bitcoin is going anywhere, but up. It’s not unrealistic to imagine a society that moves away from the paper money system and relies completely on Bitcoin as the official currency. Yes, this will take some time but almost everything has gone digital or is going in that route. In terms of data and information.

It’s not surprising that a scandal like this has surfaced and you can guarantee that this isn’t the last time we will hear about Bitcoin scandals, but that doesn’t make Bitcoin unsafe or bad, it just means that it has real value.

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By Henry H. Hernandez

Henry Hernandez is a veteran from Texas and a family man. Henry works with an e-commerce site that sells cheap checks online www.cheapchecksplus.com. You can connect with Henry through Google+.

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