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U.S. arrests man for selling guns online for Bitcoins

A Bitcoin logo is seen at the window of Nara Sushi, a restaurant that accepts Bitcoin, a form of digital currency, as payment in San Francis
A Bitcoin logo is seen at the window of Nara Sushi, a restaurant that accepts Bitcoin, a form of digital currency, as payment in San Francis

By Emily Flitter

NEW YORK (Reuters) - As part of their quest to crack down on anonymous Internet criminal marketplaces, U.S. authorities arrested a New Hampshire man for selling guns online in exchange for the digital currency Bitcoin on the Internet site Black Market Reloaded, U.S. prosecutors in New Jersey said on Thursday.

Prosecutors charged the man, Matthew Crisafi, 38, with conspiracy to commit money laundering, smuggling goods from the United States and selling firearms without a license. He was to be presented in court in New Hampshire late on Thursday before being brought to New Jersey to face the charges.

In a criminal complaint filed on Thursday, authorities described Black Market Reloaded as a site similar in appearance to the widely used Internet marketplaces EBay and Amazon.com but accessible only via the encrypted network Tor, which hides users' identifying information, including digital tags signifying their location.

Customers and vendors on Black Market Reloaded transact in Bitcoins, according to the complaint. Bitcoins are units of virtual currency governed not by any central government or company but by computer code that is modified whenever users acquire or disburse their units.

Crisafi's arrest comes a month after authorities shuttered the best-known underground online marketplace, Silk Road, and arrested its alleged founder, Ross Ulbricht.

Cybercrime experts widely predicted new sites would quickly move to fill Silk Road's void. Black Market Reloaded, according to the complaint, has been operating since at least April 2013, when agents from the Department of Homeland Security began investigating it.

Prosecutors said in the complaint that Crisafi had a profile on Black Market Reloaded and that over three months he allegedly sold semiautomatic handguns and rifles, including an AR-15 Bushmaster assault rifle, to an undercover agent. He used U.S. mail to ship the guns to New Jersey, the complaint said.

The arrest adds to a pattern of pursuit by U.S. authorities of participants in online marketplaces, whether they are vendors or operators. Before they arrested Ulbricht in the Silk Road case, federal authorities arrested an alleged drug vendor from the site, who they said was selling drugs from South Carolina.

In addition, federal prosecutors in Baltimore said on Thursday that two people agreed this week to plead guilty to charges related to selling drugs on Silk Road.

"People who think they can hide behind a veil of an 'underground' website to buy and sell weapons illegally are mistaken," said Andrew McLees, the Homeland Security Investigations agent who directed the Crisafi case.

"HSI will use all of our collective resources to track you down and bring you to justice."

Reuters reported on Wednesday that Silk Road had been re-launched and was again open for business.

(Editing by Dan Grebler)

(This story was refiled to correct number of people in Baltimore case from four to two in the ninth paragraph)

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