Bitcoin pioneer Charlie Shrem is being sued by his former business partners, twin brothers Cameron and Tyler Winklevoss. The twins accuse Shrem of owing them 5,000 bitcoin, around $32 million worth by today’s prices.

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Bitcoin Pioneer Charlie Shrem Sued by Winklevoss

“The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins,” Shrem’s lawyer wrote in a released statement on the matter. “Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”

Nathaniel Popper of The New York Times quotes from the lawsuit, “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” from the brothers.



Charlie Shrem has the dubious distinction of being the first quasi crypto celebrity to be convicted and serve prison time related to bitcoin activity. He was arrested in 2014, plead guilty, and went to federal prison in 2015, over charges relating to the facilitation of Silk Road illegal drug purchases through his company Bitinstant. He was released in 2016.

5,000 Missing

Cameron and Tyler Winklevoss were early investors in the company with Shrem, who they tapped to introduce them to the new world of Bitcoin. They loaned him hundreds of thousands of dollars to purchase bitcoin on their behalf, and at some point 5,000 bitcoin was never accounted for.

Shortly before Shrem was arrested, Bitinstant had taken a dive, and the twins openly questioned his handling of the company. After his arrest and conviction, the brothers seemed eager to distance themselves. The 5,000 bitcoin were lost in the shuffle. No more.

With Shrem’s purchases of real estate and expensive vehicles, 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,” Popper notes.

A Tough Road

Shrem has attempted to reclaim his reputation as a pioneer in the space, and was quite active in lending his name, at least, to a few crypto projects. Two of them ended in disaster, with the companies forced to return money to investors after deals collapsed. Famously, Shrem, when released from prison, could only find dishwashing work.

By today’s prices, he owes the twins over $30 million. “The lawsuit could blossom into an ever bigger problem for Mr. Shrem,” Popper continues, “because an affidavit filed in court suggests that Mr. Shrem has also not paid the government $950,000 in restitution that he agreed to as part of his 2014 guilty plea.”



The Winklevoss have done comparatively well in the space. At one point they were touted as the first billionaires in the crypto space, but market prices have since fallen.

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