Former BitInstant operator Charlie Shrem was handed a two-year prison sentence on Friday.
Shrem had pleaded guilty to charges of aiding and abetting an unlicensed money transmitting business in September. As part of a plea deal, he and accused co-conspirator Robert Faiella forfeited $950,000. Charges of Money Laundering were dropped.
Judge Jed Rakoff said that Shrem knowingly engaged in activities that were in violation of the law. Sentencing guidelines originally called for up to 71 months.
Shrem's attorney, Marc Agnifilo, argued that Shrem's actions were a momentary youthful lapse and that a lengthy sentence would be too harsh. Agnifilo has been instrumental in helping Shrem obtain relaxed terms of house arrest which allowed him to travel within the New York area and remain highly active in the Bitcoin world.
Shrem sought to show remorse in court, saying:
"I screwed up. The bitcoin community, they're scared and there is no money laundering going on any more. They're terrified. Bitcoin is my baby, it’s my whole world and my whole life, it’s what I was put on this earth to do. I need to be out there. If your honor grants me that, I can be out there in the world, making sure that people don't do the same stupid things that I did."
He departed the courthouse with family, allowed to surrender to federal prison in March. He told Bloomberg:
"Justice has been served. They were trying to put me away for more than six years, which would have been unfair. I think it turned out alright."
Sentencing for Faiella is scheduled for January.
