Legal

Winklevoss Twins Sue Charlie Shrem Over Bitcoin Theft

winklevoss-lawsuit

The Winklevoss twins have filed a lawsuit against Charlie Shrem, accusing him of pocketing funds to purchase bitcoin for himself.

The New York Times reported that according to the lawsuit—which was filed in federal court in Manhattan in September 2018—Winklevoss Capital Fund (WCF) hired Shrem in late 2012 to purchase bitcoins on its behalf. But of the $250,000 sent to Shrem in the fall of 2012, only $189,000 has been accounted for. The company now claims that Shrem kept the difference to “purchase 5,000 bitcoin for himself.”

Cameron Winklevoss noticed the error within months and emailed Shrem in February 2013 for a full accounting of the money: “I have been patient and at this point it’s getting a bit absurd,” Winklevoss wrote. “I will have no choice but to take measures to get this done if you don’t start giving me a firm answer as to when you will complete this work.”

While it is unknown why it took five years for the investment firm to file a lawsuit, it is asking for the 5,000 bitcoins back, which would now be worth over $31.3 million.

WCF said it can show that Shrem took those 5,000 bitcoins and transferred them to a vanity wallet address that contained the string “1Shrem.”

“Shrem has been on a steadily increasing buying spree since July of last year, paying cash for more than $4 million in real estate in and around Sarasota, Florida, (ii) two Maseratis, and two power boats,” according to another court filing. “Most of these assets were acquired in just the last six months, including a $2.25 million property purchased on July 27, 2018; a $370,000 property purchased on June 19, 2018; two properties worth a combined $825,000 in March 2018; and one Maserati in July 2018.”

Shrem’s lawyer, Brian Klein, said in a statement that “Charlie plans to vigorously defend himself and quickly clear his name.”

Shrem was released from prison in 2016 after being convicted for aiding and abetting an unlicensed money-transfer business — sending $1 million in bitcoin that was found on the drug website Silk Road.

 

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