Crypto's Early Innovator Turns Advocate for Compliance: The Charlie Shrem Saga
Charlie Shrem – founder of the fallen Bitcoin (BTC) exchange Bitshrem – has pivoted to being a voice for regulatory compliance after being jailed for crypto violations eight years ago.
The exchange co-founder is now a general partner at Druid Ventures, an early-stage crypto VC firm providing growth and strategic advisory services.
“There’s a whole bunch of people out there wrestling with the crypto compliance beast, trying to figure it all out with their lawyers,” Shrem told the Wall Street Journal (WSJ). “That’s where I come in, helping them get their ducks in a row.”
Having founded Bitshrem in 2011, the early Bitcoin investor’s company surged in trading volume in 2013 as Bitcoin’s price rallied from roughly $100 to over $1000 by year-end. It then received a $1.5 million investment from Winklevoss Capital to help scale operations.
However, the ex-CEO found himself jailed in 2015 on charges of operating an unlicensed money-transmitting business, and for allegedly attempting to launder over $1 million through the defunct darknet marketplace Silk Road. He spent two years behind bars.
Shrem said that while he didn’t expect to return to crypto after his time in jail, he reconsidered the way he could affect the industry by pushing it toward compliance. Byte Federal, for instance, is a Bitcoin ATM operator that he says he is proud to have encouraged to acquire a money transmitter license.
While Byte Federal co-founder Lennart Lopin cannot recall having received direct regulatory advice from Shrem, he acknowledged how Shrem’s personal story affected his firm’s motivation to seek compliance. He said:
“[Shrem’s] arrest was one of the moments where everybody started to think that we live in an environment of rules and laws.”
Shrem said he
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