Former Bitcoin Foundation exec Charlie Shrem has been jailed for two years for his part in helping people illegally swap cash for bitcoins on black market site Silk Road.

The virtual currency was the only form of payment accepted on the now-defunct online bazaar.

In September 25-year-old Shrem pleaded guilty to charges of being involved in the illegal currency trading, telling the court that he “knew that much of the business on Silk Road involved the buying and selling of narcotics”.

Shrem admitted last week he had "screwed up" He added: "Bitcoin is my baby, it’s my whole world and my whole life, it’s what I was put on this earth to do. I need to be out there. If your honor grants me that, I can be out there in the world, making sure that people don’t do the same stupid things that I did.”

On sentencing US District Judge Jed Rakoff said Shrem had committed a serious crime and that the prison term was warranted, reported Bloomberg.

“There’s no question that Mr. Shrem, over a period of many months, was knowingly, wilfully, to some extent excitedly and even passionately involved in activities he knew were, in part, involved in serious violations of the law,” the judge said.

However, Shrem is reported to have been pleased with the verdict. “They were trying to put me away for more than six years, which would have been unfair. I think it turned out alright," he said.

The main defendent, Robert Faiella, will be sentenced next month for his key role in establishing the exchange network.

Both men have agreed to forfeit $950,000 (£608,000) to the US government.

US Marshals last month auctioned off 50,000 bitcoins seized from the Silk Road site worth $19m (£12m).