Investing.com - Bitcoin prices were under pressure on Tuesday, amid growing concern the virtual currency could be used to aid crime following the arrest of Bitcoin Foundation Vice Chairman Charlie Shrem.
BTC/USD fell to a session low of USD912.02 on the Tokyo-based Mt. Gox Bitcoin exchange, before trimming losses to trade at USD925.00 during European morning hours, down 4%.
The U.S. Department of Justice announced Monday that it arrested Charlie Shrem, vice chairman of the Bitcoin Foundation and CEO of Bitcoin payment processor BitInstant.
The Bitcoin Foundation is a trade group promoting the adoption of the digital currency, while BitInstant allowed users to exchange Bitcoins for dollars and vice versa.
Shrem was charged with conspiring to commit money laundering by helping to funnel cash to illicit online narcotics traffickers.
According to prosecutors, Shrem conspired with a Florida resident, Robert Faiella, who ran an illegal exchange, to sell more than USD1million in Bitcoins to users of Silk Road, which was closed down by authorities last year.
Nearly 29,600 Bitcoins were seized from Silk Road, an online market that sold drugs and hacking services, in December 2013.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.
Prices of the virtual currency soared to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.