Winklevoss Twins Suing Former Business Partner Over 5,000 Bitcoin

Cameron and Tyler Winklevoss are suing their former bitcoin advisor, Charlie Shrem, for allegedly stealing 5,000 bitcoin (worth approximately $31.7 million today) from them in 2012, according to a November 2 article in The New York Times.

Shrem is one of the first big bitcoin advocates and the former CEO and founder of the now-defunct crypto payment processor, BitInstant. In 2015, Shrem was arrested and spent a year in a federal prison in Lewisburg, Pennsylvania, after selling bitcoin used to purchase drugs off of the infamous Silk Road black market website. He pleaded guilty to aiding and abetting an unlicensed money transmitter.

In a 2017 podcast, Shrem said he went to prison with only “three or four” bitcoin to his name, and worked as a dishwasher for six months when he got out; he says he didn’t even turn on a computer until two months after he was released.

However, since his release from prison, the Winklevoss brothers have apparently been watching as he has gone on a bit of a spending spree. According to the Times, The lawsuit states:

“Either Shrem has been incredibly lucky and successful since leaving prison, or – more likely – he ‘acquired’ his six properties, two Maseratis, two powerboats and other holdings with the appreciated value of the 5,000 Bitcoin he stole.”

The twins say that in September 2012 they gave Shrem $250,000 to purchase bitcoin for them. However, according to the lawsuit, the twins claim they only received approximately $189,000 worth of bitcoin back from Shrem.

Although Shrem’s lawyer considers the charges to be without merit and declared that Shrem is determined to “vigorously defend himself and quickly clear his name,” the judge from his previous trial has reportedly agreed to freeze any financial assets Shrem holds on Xapo or Coinbase after an investigator hired by the twins found Shrem had at one point transferred the money using those companies’ wallet services.

Even if this lawsuit is resolved in Shrem’s favor, he may still lose money. According to the Times, as part of his plea deal before entering prison, Shrem agreed to hand over $950,000 in restitution but never did.

Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.

Like what you read? Follow us on X @Bitnewsbot to receive the latest Winklevoss twins, Tyler Winklevoss or other Ethereum law and legislation news.