Winklevoss Brothers Court Battle vs. Charlie Shrem

A New York judge has lifted the freeze on Shrem’s assets after a court hearing this week.

New York federal judge Jed Rakoff has reversed his previous ruling in a lawsuit filed by Gemini owners Cameron and Tyler Winklevoss against the former CEO of the Bitinstant exchange, Charlie Shrem. Rakoff unblocked Shrem’s assets, which were initially frozen in September as part of claims for 5,000 missing Bitcoins, Bloomberg reported on Thursday.

The dispute dates back to 2012, when the Winklevosses hired Shrem as an advisor for their early crypto projects and gave him more than $1 million to buy BTC for them from “deep-pocket investors.” However, the brothers claim they later found 5,000 coins to be missing. The combined value at the time was $61,000 and nearly $32 million at current prices.

Shrem explained before a New York federal court that he never owned those 5,000 coins because they belong to a famous crypto industry representative he declined to identify. The former Bitinstant head asked the judge to dismiss the lawsuit.

Tyler Meade, the lawyer representing the Winklevosses, argued that the asset freeze should continue because of Shrem’s recent luxury purchases, among them a $2 million home in Florida. Meade had requested information from 30 institutions and found that the defendant has only $10 to his name despite claiming publicly that he owns real estate worth $12 million.

“We do not have to show that he is actually hiding assets although we believe he is,” the lawyer said as quoted by Bloomberg.

According to Brian Klein, who represents Shrem in court, the Winklevoss case is about $61,000, not $32 million, and his client has agreed to place the sum in escrow if he loses the legal battle. The asset freeze termination is the first step toward Shrem’s “complete vindication,” Klein said.

Justice Rakoff ruled the case should continue, with a trial scheduled for June 17.

Shrem, one of the early US crypto investors, was sent to jail for a year in 2015 for facilitating drug purchases with Bitcoin through Bitinstant. The Winklevoss brothers were among the investors in the now-defunct crypto exchange.