Meet Robert Faiella: The South Florida Man Who Laundered Millions With Bitcoin

He called himself "BTCKing."

Marking one of the first major busts in the nascent currency's history, the feds arrested Robert Faiella Monday afternoon at his Cape Coral home and accused him of selling more than $1 million in Bitcoins to drug traffickers through the black market website Silk Road.

Faiella, who doesn't have a prior criminal history and once owned the Italian Kitchen in Cape Coral, allegedly participated in a scheme with Bitcoin soothsayer Charlie Shrem to operate Faiella's underground Bitcoin exchanger, BTCKing.

Silk Road, which is also known as the "Amazon.com for drugs," was shut down in October of last year -- but not before some mad illegal behavior went down on the site, which only accepted Bitcoin in currency and allowed users to browse anonymously sans traffic monitors.

Silk Road was the gentlemen's way to traffic drugs and lured all sorts of dweeby white dudes to the criminal activity. Its mastermind was Ross Ulbricht, who called himself the "Dread Pirate Roberts," and brought a whole new meaning to the idea of paleness, was arrested when the site went kaput.

Enter Faiella: The feds say he was deep into Silk Road. Between December of 2011 and when the site was shut down, he sold Bitcoins to drug traffickers' at an inflated cost, then funneling them through a New York company which allowed them to exchange the currency for cash anonymously.

The man who ran that New York company was none other than Bitcoin poster child Charlie Shrem, who's accused, in addition to money laundering, of buying drugs on Silk Road.

The feds haven't just taken aim at the accused, but at the idea of Bitcoin itself, which is a peer-to-peer system of currency.

"Truly innovative business models don't need to resort to old-fashioned law-breaking," Manhattan U.S. Attorney Preet Bharara said. "When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act."

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