Shrem’s case has been seen as something of a bellwether for the federal law enforcement attitudes towards bitcoin businesses in general, and a strong predictor of the looming case against accused Silk Road mastermind Ross Ulbricht. Shrem faced some 30 years in prison under the terrorism and drug trafficking provisions of the PATRIOT Act. Under the plea deal, Shrem is unlikely to serve any time in prison, as unlicensed money transmission is rarely punished with more than a fine or community service. Shrem has already spent seven months under house arrest, and any sentence is likely to result in “time served” under the plea.
The fate of Shrem’s co-defendant Robert Faiella, aka “BTCKing,” is less clear. Unlike Shrem, whose role in the conspiracy charges was largely limited to running an unlicensed bitcoin-brokerage business, Faiella’s role was more direct. Prosecutors claim he sold more than $1 million of bitcoin to drug traffickers for use on Silk Road via BitInstant. Faiella has no criminal record, but had previously entered “not guilty” pleas in earlier trials. His trial is scheduled for Sept. 22.