- Winklevoss twins sued Shrem claiming he misappropriated their $750,000 investment and bought 5,000 Bitcoins which he never gave to them
- Shrem’s assets which were frozen in October have now been released
- Trial has been scheduled for June 17, 2019.
Tyler and Cameron Winklevoss, the twin brothers behind the Gemini cryptocurrency exchange, have lost one round in an ongoing lawsuit filed against Charlie Shrem, the former CEO of the BitInstant exchange. Now, federal Judge Rakoff, of the U.S District Court for the Southern District of New York, has lifted a $30 million attachment order which earlier allowed the judge to freeze Shrem’s assets, according to a Bloomberg report on November 9.
Shrem Wins Bitcoin Battle
Per sources close to the development, the Winklevoss brothers and their firm Winklevoss Capital LLC, have lost a round in the ongoing lawsuit filed against the former CEO of BitInstant cryptocurrency exchange, Charles Shrem
According to a Bloomberg report, the Winklevoss twins dragged Shrem to court, claiming he had used part of their $750,000 investment in his digital assets exchange to purchase 5,000 bitcoins on their behalf in 2012, which was valued at $61,000 at the time, but he never gave them the coins.
The plaintiffs argue that the defendant, who had spent a year in prison for his involvement in the Silk Road saga had used the Bitcoin he acquired with their funds to furnish a flamboyant lifestyle.
“We do not have to show that he is actually hiding assets, although we believe he is,” said Tyler Meade, an attorney for the Winklevosses.
Meade asked the court to continue freezing Shrem’s assets, arguing that the plaintiff’s $2 million property in Florida and the $12 million in real estate investments he claimed to own, were all purchased with the Plaintiff’s bitcoins which have now appreciated to roughly $32 million.
Shrem Asks Judge to Dismiss the Case
Interestingly, Meade had reportedly said that the lawyers of the Winklevoss twins had requested information from 30 cryptocurrency exchanges and financial institutions concerning any assets which they held on behalf of Shrem.
However, they could only identify a meager $10 in digital assets belonging to the defendant.
Shrem has asked the U.S. District Judge Rakoff to dismiss the case, claiming he never owned the 5,000 bitcoins, arguing that the cryptoassets belong to an anonymous bitcoin big whale who had given him the go-ahead to spend as much as $50K a month on living expenses.
Shrem’s lawyer, Brian Klein also claimed that a considerable chunk of his client’s investments is in real estate and that the value of his client’s cryptos has declined significantly.
Klein claims the lawsuit is a dispute over $61,000 and has reportedly pledged to place the funds in escrow until it is determined if Shrem loses the case.
A trial is scheduled for June 17, 2019.