CAPE CORAL, Fla. - WINK News has learned a Cape Coral man is caught up in a million dollar Bitcoin drug conspiracy. Federal prosecutors say Robert Faiella sold the electronic money to people on a black market website. Prosecutors say those people would turn around and buy drugs anonymously.
Federal prosecutors say Cape Coral resident Robert Faiella called himself "BTCKing" and say he and BitInstant millionaire CEO Charlie Shrem sold Bitcoins to people who then bought illegal drugs on the black market website Silk Road.
Prosecutors arrested Shrem, 24, Sunday at JFK International Airport.
Faiella, 52, the alleged conspirator, was arrested Monday at his Cape Coral home, out of a warrant from New York.
WINK News obtained the lengthy criminal complaint which say Faiella started the underground Bitcoin exchange around December 2011.
"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act," said Manhattan U.S. Attorney Preet Bharara.
The US Attorneys Office says Faiella exchanged tens of thousands of dollars a week in Bitcoins until the Silk Road website was shut down by law enforcement October of 2013.
Faiella has a detention hearing in federal court on Thursday.