From Lawsuits to Fortunes: Winklevoss Sue Charlie Shrem for 5K BTC
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Nov. 2, 2018

According to the New York Times, the founders of the Gemini crypto exchange, brothers Cameron and Tyler Winklevoss, are suing an early supporter of Bitcoin and the entrepreneur Charlie Shrem because of several thousand bitcoins that he allegedly appropriated during a business deal several years ago.

Shrem, who served a prison term for money laundering and providing financial services without a license through his Bitinstant exchange, helped the brothers to invest in Bitcoin in 2012.

In its publication, the New York Times refers to a lawsuit filed by Winklevoss in September. There, Shrem was named the first crypto-investment consultant of the brothers, to whom they transferred $750,000 to buy bitcoins for them. In September 2012, they gave him another $250,000 for the same purpose, later realizing that they did not receive bitcoins in full amount. Now they want to return about 5,000 bitcoins or almost $32 million at the current rate. At the time of the deal in 2012, Bitcoin was worth about $12.50.

Brothers claim that they turned to Shrem asking to return the bitcoins, but the claim was never satisfied. The lawsuit also contains an inventory of Shrem's major purchases, which he made after his release from prison when he allegedly had almost no money: two Maserati sports cars, two boats, and Florida real estate worth $2 million. Winklevoss are suspecting that all this luxury life came to Shrem from those bitcoins he ‘forgot’ to return.

“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,” stated in the lawsuit.

After such a show-off, brothers couldn't hold themselves and hired an investigator, who found out about the 5,000 BTC transaction made in 2013 from addresses associated with Shrem. The assets, according to the investigation Winklevoss ordered, landed “onto the Bitcoin wallet services Xapo and Coinbase”. Such exact results of the inspection were available due to the blockchain publicity and immutability.

The publication also reports that part of Shrem’s assets was frozen in the course of legal proceedings in the past. The defendant’s lawyer, Brian Klein, stated:

“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.”

Looks like Winklevoss brothers prefer to make their fortunes from the legal playground. Winklevoss bought their first bitcoins with the money they got from Zuckerberg. In 2008, he paid them $65 million as part of the settlement agreement.

Winklevoss: the Gemini Dream

The brothers blamed Zuckerberg for stealing the Facebook idea from them, allegedly by copying the code from HarvardConnection, which is similar in concept. During the court proceedings, the parties reached an amicable settlement and Zuckerberg paid the money. Among the evidence brothers were pushing to the court, were the e-mails they sent to Zuckerberg. The same type of evidence is listed in the current case against the Shrem.

“I have been patient and at this point, it’s getting a bit absurd. I don’t take this lightly,” Cameron Winklevoss wrote to Shrem in 2013 in an email quoted in the lawsuit.

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