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Bitcoin Billionaires Winklevoss Twins Sue Crypto Pioneer Charlie Shrem

Last Updated March 4, 2021 3:06 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:06 PM

Cameron and Tyler Winklevoss, the “first bitcoin billionaires” and the founders of cryptocurrency exchange Gemini, have reportedly filed a lawsuit against crypto pioneer Charlie Shrem.

Shrem, the 28-year-old Bitinstant founder who served time in federal prison for knowingly selling bitcoins to people who said that they wanted to use the funds to purchase drugs on now-defunct dark web marketplace Silk Road, has claimed that he went to prison with virtually no money. However, in the two years since his release, he has lived an affluent lifestyle, acquiring millions of dollars in property, as well as multiple Maseratis and powerboats.

Now, according to New York Times crypto lead Nathaniel Popper, Shrem’s former business partners — the Winklevoss twins — have filed a suit  alleging that he stole 5,000 bitcoins from them in 2012, coins that are now worth more than $31 million and were valued at nearly $100 million at their Dec. 2017 peak.

charlie shrem bitcoin
Charlie Shrem | Source: Byte Federal/YouTube 

“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,” an excerpted portion of the filing reads.

According to the report, Shrem may also owe the government $950,000 in restitution stemming from his 2014 plea agreement, and the judge who oversaw that trial has “agreed to freeze some of…Shrem’s financial assets.” Separately, US District Court Judge Jed S. Rakooff granted the Winklevoss twins’ request to freeze any bitcoin funds that Shrem was holding at Xapo and Coinbase, where the twins’ private investigator believed he had funneled the missing BTC.

Responding to the Winklevoss brothers’ allegations, Brian Klein, Shrem’s lawyer, said that the claims “could not be further from the truth” and that Shrem — who also founded the once-influential Bitcoin Foundation — will “quickly clear his name” in court.

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

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