What happened to Charlie Shrem and BitInstant?
Charlie Shrem made a name for himself while heading BitInstant with Gareth Nelson and Erik Voorhees. At one time, BitInstant accounted for approximately 30 percent of all bitcoin transactions. The company performed quite well from 2011 until 2013 with investment capital coming from angel investors such as Roger Ver.
What is BitInstant and how does it work?
They started BitInstant, a more user-friendly company that charged a fee for users to purchase and make purchases with bitcoins at over 700,000 locations, providing temporary credit to speed up transactions. Initially a side project, BitInstant soon needed to grow, at which point Shrem received a $10,000 loan from his mother.
How long does BitInstant take to deposit?
Bitinstant made most deposits happen instantly - within a matter of seconds in ideal cases, and in an absolute worst-case scenario they will still aim to have funds into your exchange account before a stated maximum deadline (on average about 30 minutes depending on various conditions).
What happened to Charlie Shrem?
Charlie Shrem was sentenced to two years in prison and three years of supervised release for his involvement with the black-market trading of Bitcoin. He served one year of his sentence before being released in 2016.
Is the creator of Bitcoin in jail?
He was released from prison in 2016. In 2017, he joined Jaxx and served as its chief operating officer, and founded cryptocurrency advisory CryptoIQ....Charlie ShremYears active2009–presentKnown forEntrepreneurSpouse(s)Courtney M. Shrem5 more rows
What caused the sudden drop in Bitcoin?
Some of the drops have been caused by a combination of factors, Noble theorizes, from excitement about low-quality coins, to negative remarks from Elon Musk, to China's recent crackdown on crypto services. This mix of factors has potential to make sell-offs “all the more violent,” says Noble.
What happened to Mt Gox Bitcoins?
Gox lost 850,000 BTC in a hack, a creditor dump could conceivably be worse. That said, Mt. Gox wasn't able to get back the stolen bitcoins, so the trustee is not actually paying out 850,000 BTC to creditors. Mt.
Can police trace Bitcoin?
Although it is reported that most bitcoin transactions (98.9%) are not associated to criminal activity, the birth of cryptocurrency has provided individuals with new mediums to facilitate criminal activity. As a digital currency, there is no way to track or identify who is sending or receiving Bitcoin.
How much Bitcoin does the FBI have?
A new report from Wired magazine indicates that the FBI is now in control of two addresses, or wallets, holding bitcoin worth as much as $120 million.
Can Bitcoin crash to zero?
The historic Bitcoin returns have helped such experts to calculate the risk-neutral disaster possibility, and they haven't ruled out the possibility of this virtual currency crashing to zero. However, some experts argue that this virtual currency will eventually lose its value due to its lack of intrinsic value.
Will crypto Rise Again 2022?
Experts Say Bitcoin Could Hit $100,000 In 2022.
Will Bitcoin rise again?
While some experts believe that crypto markets will bounce back from the current crash in the next few months, others think that investor wariness is going to persist in the near-short term. “I strongly think crypto will rise again. By August 2022, the bloodbath and bitcoins4cards.com crypto winter should be over.
Who stole Mt. Gox coins?
From 1 February 2014 until the end of March, during the period of Mt. Gox problems, the value of bitcoin declined by 36%. The United States Department of Justice identified Alexander Vinnik, owner of the BTC-e bitcoin exchange, as an alleged key figure in the laundering of Mt. Gox's stolen bitcoins.
Who was responsible for Mt. Gox?
The company was started by US programmer Jed McCaleb in 2010 and sold to French developer Mark Karpelés in 2011. Mt. Gox was more than a big player in the cryptocurrency world. At its peak in 2013, the exchange handled a whopping 70% of all bitcoin transactions worldwide.
What happens if a crypto exchange goes under?
"First, the assets held on the exchange will be sold to cover debts to creditors and legal fees," explains Nick Saponaro, founder and chief executive officer of crypto payment platform, Divi Labs. "Only then does the user get paid. That's if there's anything left."
Why has crypto crashed today?
Record-high inflation, fear, rising interest rates and a loss of confidence in crypto investments are all contributing to the crypto crash.
Why are Cryptos crashing?
Crypto downturn is exacerbated by soaring inflation Not only is Coinbase seeing fewer transactions, but crypto prices have dropped to their lowest levels this year. The price of bitcoin, ethereum and other major tokens started falling this spring as rising inflation tightened its grip on the U.S. economy.
Who was Shrem accused of?
Shrem, who also served as the person in charge of AML compliance at BitInstant, was accused of knowingly facilitating transactions to a Silk Road re-seller, Robert Faiella. Another major issue with this case was that Shrem deposited more money than recently-passed money transmitter laws allowed for. Transactions with Faiella were done off the books in an effort to get around legal requirements.
Is BitInstant a success?
As you can likely tell, BitInstant was on a path to long-term success in its early stages. Nevertheless, a few signs started to signal the exchange’s issues. Shortly after the Jumio integration, BitInstant had to shut down trading operations in a few states due to regulatory pressures.
Did Shrem steal BTC?
In September 2018, the Winklevoss twins filed a lawsuit against Shrem for $32 million. The twins claimed that Shrem stole thousands of BTC from them back in 2012. As a result of this case, officials have frozen some of Shrem’s assets. Documents also show that, as of November 2018, Shrem has yet to pay the $950,000 restitution fee required for his 2014 conviction.
Who owns BitInstant?
BitInstant was founded in 2011 by Gareth Nelson and Charlie Shrem. The company allowed its customers to purchase the bitcoins via more than 700,000 stores, including Walmart, Walgreens, and Duane Reade.
Why did BitInstant suspend services?
In July 2013, BitInstant suspended services, saying it wanted "to improve the code based on trends they noticed" in nearly 17,300 customer service complaints. Several days earlier, a class action lawsuit had been filed on behalf of customers, claiming failure to perform services and false representation.
Where is BitInstant based?
BitInstant was a bitcoin exchange start-up based in New York City . Founded in 2011 by Gareth Nelson and Charlie Shrem, BitInstant provided a means to pay traditional funds rapidly to bitcoin exchanges.
Where is the article "BitInstant" from?
This article "BitInstant" is from Wikipedia. The list of its authors can be seen in its historical and/or the page Edithistory:BitInstant. Articles copied from Draft Namespace on Wikipedia could be seen on the Draft Namespace of Wikipedia and not main one.
Who offered to buy bitcoins for Mitt Romney?
In September 2012, when presidential candidate Mitt Romney was threatened with blackmail unless he paid an anonymous group $1 million in bitcoin, BitInstant's Erik Voorhees offered to purchase the bitcoin for him without a fee.
Does BitInstant work with Jumio?
In June 2013, BitInstant announced integration with Jumio, an online payment company led by Daniel Mattes. Jumio's Netverify software allows BitInstant to verify customers' identity. BitInstant also restricted bitcoin transactions in some states, stating that "We have temporarily limited transactions in some locations, and we apologize for the inconvenience. We believe that these measures are vital to serving the interests of both BitInstant and the greater bitcoin community."
Who owns BitInstant?
BitInstant was founded in 2011 by Gareth Nelson and Charlie Shrem. The company allowed its customers to purchase the bitcoins via more than 700,000 stores, including Walmart, Walgreens, and Duane Reade.
Why did BitInstant suspend services?
In July 2013, BitInstant suspended services, saying it wanted "to improve the code based on trends they noticed" in nearly 17,300 customer service complaints. Several days earlier, a class action lawsuit had been filed on behalf of customers, claiming failure to perform services and false representation.
What is Bitinstant bitcoin?
Bitinstant. This is the approved revision of this page, as well as being the most recent. BitInstant was a bitcoin exchange start-up based in New York City. Founded in 2011 by Gareth Nelson and Charlie Shrem, BitInstant provided a means to rapidly pay traditional funds to bitcoin exchanges.
How much is BitInstant fee?
BitInstant dynamically calculates fees based on various factors, and start at 0.26%. Discounted rates may be available for certain high-volume traders through special arrangement, contact them for more details Their rates can be viewed on their Rates & Fees page, as well as on their homepage.
What is BitInstant's warning letter?
The New York State Department of Financial Services issued a warning letter to BitInstant, asking it to comply with regulations governing money transmission businesses.
Is BitInstant still offline?
BitInstant was a service that provided rapid transfers of funds between and into bitcoin exchanges with support for various payment methods. It is now offline after founder Charlie Shrem faced legal issues.
Does BitInstant work with Jumio?
In June 2013, BitInstant announced integration with Jumio, an online payment company led by Daniel Mattes. Jumio's Netverify software allows BitInstant to verify customers' identity. BitInstant also restricted bitcoin transactions in some states, stating that "We have temporarily limited transactions in some locations, and we apologize for the inconvenience. We believe that these measures are vital to serving the interests of both BitInstant and the greater bitcoin community.".
Who is the founder of BitInstant?
Partially in response to this incident, Shrem partnered with a friend and fellow cryptocurrency enthusiast named Gareth Nelson to launch BitInstant. BitInstant was designed as a user-friendly service that helped people convert money into Bitcoin. 2. BitInstant became a massive success, at one point accounting for roughly 30% ...
When did Shrem quit BitInstant?
BitInstant closed down in 2013, and Shrem resigned from his position with the Bitcoin Foundation after he was charged in early 2014. 5. Following his release from jail, Shrem reportedly worked as a dishwasher, having lost nearly all of the money he had earned from operating BitInstant through legal fees and penalties. 6.
What did Shrem forfeit?
District Judge Jed Rakoff in Manhattan ordered Shrem to forfeit nearly $1 million. Shrem officially pleaded guilty in September 2014 to aiding and abetting an unlicensed money transmitting business. 4
Why is Shrem a Bitcoin purist?
In the midst of the BitInstant craze, Shrem described himself as a "Bitcoin purist," a supporter of the digital currency who backed the technology because of what he perceived as its increased security and autonomy over traditional banking institutions.
What did Shrem do?
Shrem officially pleaded guilty in September 2014 to aiding and abetting an unlicensed money transmitting business. 4. Judge Rakoff described Shrem as an individual who had "excitedly" participated in the crime. As Judge Rakoff imposed the sentence on Shrem, he remarked:
Why did Charlie Shrem go to jail?
A staunch supporter of Bitcoin and the cryptocurrency space, Shrem spent two years in prison for activity related to an unlicensed money-transmitting business. 1.
How long was Shrem in prison?
While Shrem could have been sentenced to up to five years in prison (the court's probation office suggested a term of nearly that long), he ultimately remained under curfew and probation through March 2015. He was imprisoned from late March 2015 through June 2016.
What happened to Shrem in 2014?
On January 26, 2014, on returning from an e-commerce convention, Shrem was arrested at JFK Airport. Prosecutors alleged that Shrem and Robert Faiella conspired to launder $1 million worth of bitcoins to help users of the Silk Road marketplace anonymously make illegal purchases. Shrem was also charged with failing to report suspicious banking activity and operating an unlicensed money-transmitting business. He was released on $1 million bail on January 28, 2014, on the condition that he submit to electronic monitoring and live with his parents in their Marine Park, Brooklyn home.
What was the charge against Shrem?
Shrem was indicted on April 10, 2014 on accusations of "operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities." On September 4, 2014, he pleaded guilty to a reduced charge of aiding and abetting unlicensed money transmission. On December 19, 2014, he was convicted of the reduced charge, ordered to forfeit $950,000, and sentenced to two years in prison. He surrendered to authorities on March 30, 2015, and subsequently entered Lewisburg Federal Prison Camp in Pennsylvania. He was released from prison around June 2016.
How much did Shrem steal from the Winklevoss twins?
In September 2018 the Winklevoss twins sued Shrem for $32 million, claiming that he stole thousands of bitcoin from them in 2012. Part of his assets were frozen as a result of the case. An affidavit filed in the case suggested that the $950,000 restitution required in his 2014 conviction had not been paid.
What did Shrem do in 2011?
As a college senior in 2011, Shrem started investing in bitcoin. Soon after, the bitcoin service Shrem was using crashed, and he lost his bitcoins. Shrem and Gwen Nelson, a friend he met online, had similar frustrations with the length of time it took to buy and sell bitcoin on exchange sites. They started BitInstant, a more user-friendly company that charged a fee for users to purchase and make purchases with bitcoins at over 700,000 locations, providing temporary credit to speed up transactions. Initially a side project, BitInstant soon needed to grow, at which point Shrem received a $10,000 loan from his mother. Shortly thereafter, BitInstant received $125,000 from angel investor Roger Ver, and, in the fall of 2012, $1.5 million from a group of investors led by Winklevoss Capital Management. By 2013, BitInstant was processing approximately 30% of all bitcoin transactions. BitInstant operated from September 2011 until July 2013.
Who is Shrem in Bitcoin?
Shrem is featured in The Rise and Rise of Bitcoin, a documentary directed by Nicholas Mross that explores the origins and development of bitcoin, and premiered at the 2014 Tribeca Film Festival. He is also featured in the 2016 documentary Banking on Bitcoin, directed by Christopher Cannucciari. He was featured on a 2017 episode of NPR 's Planet Money podcast, called "Blockchain Gang". He has been written about in the 2015 book Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper, which covers the rise of bitcoin; in the 2017 book How Money Got Free: Bitcoin and the Fight for the Future of Finance by Brian Patrick Eha, about the impact of digital currency; and in the 2019 book Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption by Ben Mezrich, which covers Cameron and Tyler Winklevoss' investments in Bitcoin (including BitInstant).
Who is Shrem from CryptoIQ?
Shrem is the founder of CryptoIQ, an advisory business aiming to bring cryptocurrencies into the mainstream. In November 2018 Shrem announced a partnership with Internet operating system Friend as an advisor. In May 2019, Charlie launched his podcast Untold Stories, as an oral history of bitcoin.
When did Shrem join Jaxx?
The proposed fund was dissolved in March 2017. In May 2017 , Shrem joined Jaxx as its director of business and community development, later serving as chief operating officer. The multi-platform blockchain cryptocurrency wallet developed by Decentral enables users to control their digital assets.
Why is Charlie Shrem in prison?
Charlie Shrem, co-founder of the now-defunct BitInstant, is out of prison and spending time with family and friends in the state of Pennsylvania. Shrem was sentenced to 24 months in prison for aiding and abetting an unlicensed money transmission that derived from the Silk Road marketplace. On March 30th, 2015, Shrem surrendered himself to ...
Can a multimillionaire banker get charged?
It's sad when multimillionaire banksters can launder billions and never get charged , but the little guy gets jail time for non-crimes.
Bitinstant Early History and Funding
- When we think of cryptocurrency exchanges in 2018, there are numerous options available on the market. Back in 2011, however, this was certainly not the case. The reality was that the market had very few options for crypto traders back then. Mt. Gox, one of the first-ever crypto exchanges, had only launched in 2010. Still, it didn’t take too long for BitInstant to become a major player in t…
User Growth and Major Partnerships
- At one point, BitInstant experienced an average growth rate of 1.5x per month and facilitated transactions worth one million dollars each day. Possibly, one of the biggest catalysts for this growth trajectory was the rising prices of cryptocurrencies in 2012 and 2013. In December 2012, BTC was at around $13. By April 11, 2013, the price per BTC had skyrocketed to $266. Users cou…
The Fall of Bitinstant
- As you can likely tell, BitInstant was on a path to long-term success in its early stages. Nevertheless, a few signs started to signal the exchange’s issues. Shortly after the Jumio integration, BitInstant had to shut down trading operations in a few states due to regulatory pressures. In July 2013, BitInstant suspended its servicesin order to “imp...
Shrem Goes to Jail
- Shrem, who also served as the person in charge of AML compliance at BitInstant, was accused of knowingly facilitating transactions to a Silk Road re-seller, Robert Faiella. Another major issue with this case was that Shrem deposited more money than recently-passed money transmitter laws allowed for. Transactions with Faiella were done off the books in an effort to get around legal re…
More Fallout?
- In September 2018, the Winklevoss twins filed a lawsuit against Shrem for $32 million. The twins claimed that Shrem stole thousands of BTC from them back in 2012. As a result of this case, officials have frozen some of Shrem’s assets. Documents also show that, as of November 2018, Shrem has yet to pay the $950,000 restitution fee required for his 2014 conviction.
What Can We Learn from this?
- There are three main takeaways from the case of the BitInstant exchange’s rise and fall. First, this case demonstrates all of the things that can go wrong when a company doesn’t comply with legal and financial regulations. Prior to these issues, the exchange was one of the more successful ventures in cryptocurrency. Who knows? It could have become one of the top exchanges that w…
History
- BitInstant was founded in 2011 by Charlie Shrem and Gareth Nelson. The company allowed its customers to purchase the bitcoins via more than 700,000 stores, including Walmart, Walgreens, and Duane Reade. In September 2012, when presidential candidate Mitt Romney was threatened with blackmail unless he paid an anonymous group $1 million in bitcoin, B...
Criticism
Methods of Payment
Fund Destinations
Fees & Rates
- BitInstant received many complaints from customers concerning transactionprocessing delays sometimes of several days. In response to complaints, BitInstant CTO Gareth Nelson stated that "we are all stressing out and working day and night (literally) to get things fixed and hope to have a proper resolution for the backlogged orders". The New York St...
Customer Service
- U.S. - USD
1. Cash deposit (7-11, Walmart, CVS, and Moneygram locations) 2. Dwolla 3. Redeemable codefrom MtGox, Bitstamp and BTC-E - Brazil - BRL
1. Boleto 2. Banco Rendimento
API
External Links
- BitInstant dynamically calculates fees based on various factors, and start at 0.26%. Discounted rates may be available for certain high-volume traders through special arrangement, contact them for more detailsTheir rates can be viewed on their Rates & Feespage, as well as on their homepage.
See Also on Bitcoinwiki
- Support requestform
- E-mail: [email protected]
- General inquiries: [email protected]
- IRC:
References
- BitInstant provides an API that may be used to automate various tasks with their service. To connect to it you may use either XML-RPC or a RESTful protocol using JSON.
- For XML-RPC, please point your client at https://www.bitinstant.com/api/xmlrpc.
- For RESTful JSON, please point your client at https://www.bitinstant.com/api/json.