- Shrem’s spending pattern raised suspicion
- Shrem accused of stealing close to 5000 Bitcoins
- Shrem’s lawyer termed the allegations “baseless”
According to a report published by the New York Times, a lawsuit has been filed by the Winklevoss twins, against the Bitcoin entrepreneur Charlie Shrem. Cameron and Tyler Winklevoss have since filed a civil suit against Shrem, which suggests that he stole 5000 Bitcoins in 2013, which are worth more than $32 million today.
Lifestyle to Blame?
The lawsuit was filed after observing Shrem’s spending behavior over the past one year. Some of his extravagant purchases include two Maseratis, two powerboats and a $2 million house in Florida, among other things.
The filing reads in part:
“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.”
Mr. Shrem and his Continuous Struggles
Back in 2014, Mr. Shrem was arrested for selling Bitcoin to people involved in drug trafficking from the online drug market, Silk Road.
The federal accusations directly resulted in the downfall of his company Bitinstant.
It’s worth highlighting that Shrem was the first advisor of the Winklevoss twins in the nascent crypto industry. He even convinced the twins to get into the cryptocurrency industry.
However, things started to get awry when the twins gave $250,000 to Shrem to buy Bitcoins.
Allegedly, Shrem only delivered Bitcoins worth $189,000 to the Winklevoss twins at the rate of $12.50/BTC. The 5000 or so missing Bitcoins led to brewing tensions between the twins and Shrem.
After repeatedly asking Shrem about the missing Bitcoins, the brothers hired an investigator, who found that 5,000 Bitcoins were transferred in 2013 through addresses associated with Mr. Shrem and onto the Bitcoin wallet services Xapo and Coinbase, according to the complaint.
Further investigation lead to the discovery of money on the blockchain, the public ledger where all Bitcoin transactions are recorded. What was once a minor point of contention between the two parties within a greater partnership is now large enough in the Winklevoss’ eyes to warrant compensation.
However, Shrem’s lawyer Brian Klein has refuted the allegations made by the twins.
Klein said in a statement that the claims by the Winklevoss brothers were baseless.
“The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins,” he said. “Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”