The former CEO of a major bitcoin exchange has pleaded guilty along with one of his customers to enabling drug deals on the online drug portal Silk Road.

Charlie Shrem, the former CEO of BitInstant, and bitcoin seller Robert Faiella, were arrested earlier this year and charged with exchanging over $1 million in bitcoins that they both knew would be used to buy illicit drugs and paraphernalia on Silk Road. Faiella, 54, reportedly obtained bitcoins through Shrem’s site and then sold them at a profit to users on Silk Road.

To make matters worse, Shrem, 24, also served as the compliance officer for BitInstant and was therefore responsible for ensuring that his company followed the law. Authorities claimed that Shrem personally processed Faiella’s orders and even gave him a discount on high-volume trades.

Their business relationship didn’t start off on the best of terms. Shrem had banned Faiella from using BitInstant after becoming aware that he was reselling bitcoins on Silk Road and also threatened to report him for operating an unlicensed money exchange. Faiella responded by threatening to contact federal authorities to report BitInstant.

Faillea pleaded guilty to aiding and abetting Shrem’s business, while Shrem pleaded guilty to one count of operating an unlicensed money transmitting business. Both men will be sentenced in January and could receive a maximum sentence of five years each. BitInstant closed in July 2013, two months before federal authorities shut down Silk Road.

Last May, a prolific Silk Road drug dealer pleaded guilty to selling more drugs than anyone on the site. Dutch native Cornelis Jan Slomp, 23, admitted to shipping 566,000 ecstasy pills, 104 kilos of MDMA, and four kilos of cocaine, among other drugs. He could have faced 40 years behind bars, but prosecutors are recommending a 15-year sentence due to his cooperation with authorities.