BitInstant CEO Charlie Shrem has been charged with money laundering.
It's a blow to the Bitcoin community - Shrem is a vice chairman at the Bitcoin Foundation, and was listed as a speaker at a major Bitcoin conference in Miami this weekend.
The criminal complaint against Shrem and co-defendent Robert Faiella accuse them of illegally laundering money through the infamous drug marketplace the Silk Road.
The DOJ's criminal complaint alleges that Faiella ran a Bitcoin exhchange on the Silk Road, selling Bitcoins that he received from Shrem BitInstant. It goes onto complain that Shrem knew that Faiella was conducting illegal operations on the drug marketplace, in contravention of the law.
DOJ.gov