Before he was charged with money laundering in January, Charlie Shrem was a board member of the government-friendly Bitcoin Foundation and the public face of the New York Bitcoin startup community. Now, he sounds like a revolutionary.
In a speech to the Texas Bitcoin conference in Austin Wednesday, Shrem accused prosecutors of pursuing him for political purposes: a desire to control Bitcoin and fear of how it could shift economic power. He spoke via Skype from his parents’ home in Brooklyn, New York, where he’s being held under house arrest.
“We’ve seen high-profile politicians mobilizing in order to protect the financial and banking industry,” Shrem said. “The financial and banking industry wants to convince us that it’s only about illegal payments, that it’s about protecting the integrity of the status quo. It’s a pretext. We need to look at the big picture, Bitcoin is about something entirely different.”
In his speech, he compared Bitcoin to the printing press, arguing that just as governments and the Church opposed the democratizing effects of the first widely available books, financial and banking incumbents see the potential for Bitcoin to disassemble their control of the economy. A transcript of his speech, which he says he adapted from a 2006 address by Pirate Party leader Rick Falvinge, was published in full on Falkvinge’s website. “This is something completely new in the history of human communication and Bitcoin is one of the largest socio-economic experiments human kind has ever seen,” Shrem said.
Shrem was arrested at JFK Airport in New York in late January and charged with money laundering and operating an unlicensed money transmitting business. The criminal complaint against him accuses Shrem of knowingly selling Bitcoins to a Florida man named Robert Faiella, who in turn sold them to anonymous users of the Silk Road black market for drugs and other contraband. The company Shrem cofounded, Bitcoin exchange Bitinstant, has gone offline, and Shrem has resigned from his role at the Bitcoin Foundation.
In his talk, Shrem described his arrest as part of a larger crackdown on Bitcoin by financial powers-that-be.
During the last few weeks, we’ve seen how far a player is prepared to go to prevent loss of control. We saw the constitution being violated. We saw young MIT students pressured with government subpoenas merely for creating a proof of concept. I saw my personal freedom lost when I was arrested off the plane, stripped naked, searched and my body violated, handcuffed, and escorted out of JFK airport while returning home from a trip with my girlfriend. We saw how forced measures and restrictions of personal integrity were used by the police, not for fighting crime, but for the obvious purpose of harassing the ones involved and everyone who has been anywhere near them.
Shrem’s rhetoric represents a marked change from his earlier approach to Bitcoin’s relationship with the government. He had been a vocal member of the Bitcoin Foundation, which took a lobbying approach to dealing with Bitcoin’s acceptance by lawmakers while encouraging minimal regulation. In his speech, Shrem did praise New York superintendent of financial services Ben Lawsky, who he said has taken a reasonable approach to regulation Bitcoin. “I applaud those regulators such as Mr. Ben Lawsky of New York who see this vision, and is committed to keeping innovation alive and letting it thrive,” Shrem said. “Before I stepped down as CEO, my company BitInstant was honored to have worked with his office for over a year.”
“Illegal payments are a real threat,” Shrem concede. “However, using it as an excuse to ban or to assert control is merely a distraction. There are those who are set on bringing down our culture.”
Read Shrem’s full speech at Rick Falkvinge’s website.
Follow me on Twitter , email me, anonymously send me sensitive documents or tips , and check out the new paperback edition of my book, This Machine Kills Secrets: Julian Assange, the Cypherpunks, and Their Fight to Empower Whistleblowers.