Two Bitcoin exchange operators charged in money laundering scheme

A mock bitcoin is shown in this photo illustration in Sandy, Utah, on Sept 17, 2013. United States prosecutors on Jan 27, 2014, announced charges against two men operating Bitcoin exchange businesses for attempting to sell US$1 million (S$1.3 mi
A mock bitcoin is shown in this photo illustration in Sandy, Utah, on Sept 17, 2013. United States prosecutors on Jan 27, 2014, announced charges against two men operating Bitcoin exchange businesses for attempting to sell US$1 million (S$1.3 million) in the digital currency to users of the underground black market website Silk Road, which was shut down by the authorities in September. -- FILE PHOTO: REUTERS

NEW YORK (REUTERS) - US prosecutors on Monday announced charges against two men operating Bitcoin exchange businesses for attempting to sell US$1 million (S$1.3 million) in the digital currency to users of the underground black market website Silk Road, which was shut down by the authorities in September.

The US Attorney's office in Manhattan said in a statement that authorities arrested Charlie Schrem, chief executive officer of the exchange BitInstant.com, on Sunday and Robert Faiella, who ran an underground Bitcoin exchange called BTCKing, on Monday.

The two were charged with conspiring to commit money laundering and operating an unlicensed money transmitting business.

Schrem is also vice-president of the main Bitcoin-focused trade group, the Bitcoin Foundation, according to the foundation's website and Schrem's LinkedIn profile.