Winklevoss Brothers File Lawsuit Against Charlie Shrem for $32M in Bitcoin

The case dates from 2012 when the twins hired Shrem as a crypto adviser for their early virtual assets initiatives.

Cameron and Tyler Winklevoss, the owners of the Gemini cryptocurrency exchange, are suing virtual asset investor Charlie Shrem over 5,000 missing Bitcoins from 2012, which is now worth $32 million as per the current BTC price, the New York Times reported on Thursday. Shrem’s lawyer Brian Klein denied Winklevoss claims as baseless.

In 2012, the Winklevosses tapped Shrem as an adviser for their early crypto projects and gave him money to buy Bitcoin for them from “deep-pocket investors,” according to the NYT. First, the brothers gave him $750,000 and then an additional $250,000. However, several months later, the twins realized that Shrem had delivered them BTC 5,000 less. Winklevoss asked Shrem about the missing BTC several times.

“I have been patient and at this point it’s getting a bit absurd,” Cameron Winklevoss wrote to Shrem in 2013 in an email quoted in the lawsuit.

“I don’t take this lightly.”

In 2014, Shrem was arrested by federal authorities on the accusation of selling Bitcoins by his trading platform, the now-defunct Bitinstant, to people who wanted to buy drugs on the black market. Shrem pleaded guilty and spent one year in prison. In 2013, the Winklevosses had invested around $1.5 million Bitinstant.

After coming out of jail in 2016, Shrem participated in several crypto-related projects. The Winklevosses decided to begin a court battle in September this year after observing Shrem’s extravagant and luxury life, according to the lawsuit.

“When he purchased $4 million in real estate, two Maseratis, and two power boats, we decided it was time to get to the bottom of it,” Cameron Winklevoss explained in an interview with NYT.

The brothers hired a private investigator, who found that the BTC 5,000 had been transferred to Xapo and Coinbase wallets. In September this year, Jed S. Rakoff, a judge in the Federal District Court for the Southern District of New York, approved the Winklevosses’ complaint and froze Shrem’s funds with those companies. On Thursday, the court unsealed Winklevoss lawsuit.

Shrem’s lawyer, Brian Klein said while commenting the case for NYT:

“The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins. Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”

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