A lawyer for early bitcoin adopter Charlie Shrem is biting back at claims that his client stole 5,000 bitcoins from Cameron and Tyler Winklevoss, founders of crypto exchange Gemini and the “first bitcoin billionaires.”

In a filing dated Nov. 5, lawyer Brian Klein claims that the 5,000 BTC in question, which the Winklevoss twins allege Shrem siphoned off from funds he had purchased on their behalf in 2012, belong to another prominent investor referred to as “Mr. X” and that the suit is “nonsense.”

“Shrem engaged in no wrongdoing. Period,” Klein argued, adding later that, “This…lawsuit can only be characterized as an ambush money-grab designed to cripple Shrem financially.”

As CCN.com reported, the Winklevoss twins, via Winklevoss Capital Fund, had given Shrem — the founder of defunct bitcoin exchange BitInstant as well as the Bitcoin Foundation — $250,000 to help them invest in bitcoin. They allege that $61,000 worth of those funds were never accounted for and that Shrem used the missing capital to purchase 5,000 BTC for himself, coins that are now worth more than $32 million.

As evidence, they pointed to his lavish lifestyle, which would not seem to mesh with his claim that he had virtually no money when he went to prison in 2015 after pleading guilty to knowingly selling cryptocurrency to people who said they intended to use the funds to purchase drugs on infamous dark web marketplace Silk Road. He spent more than a year in prison, in addition to agreeing to pay the government nearly $1 million in restitution.

“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,” a portion of the suit reads.

With the help of a private investigator, the Winklevoss twins identified a bitcoin wallet that received 5,000 BTC from an address associated with Shrem around the same time that their funds went missing. The bulk of these coins eventually ended up at Xapo and Coinbase, and the twins allege that Shrem has been using them to fund millions of dollars in real estate purchases, as well as other luxury expenses including sports cars and speedboats.

In Monday’s filing, however, Klein claims that these funds belong to Mr. X, who in Dec. 2012 asked Shrem for help moving his coins into cold storage. Mr. X sent the funds to Shrem’s bitcoin address and then met him at BitInstant, where Shrem helped him set up a cold storage wallet for the BTC.

“Nor can WCF prove Shrem engaged in any misconduct. He did not. Shrem can show by verifiable evidence that he did not take the 5,000 bitcoins WCF accuses him of taking, and that they belonged to Mr. X. Shrem therefore did not breach any duty to WCF, even if one were found to exist.”

“WCF’s case collapses on itself because those 5,000 bitcoins were not owned by Shrem,” Klein added. “The scandalous and fantastical story WCF is advancing is nonsense.”

The filing further addressed the suggestion in the suit that Shrem was derelict in his obligation to pay the US government $950,000 he owed as a result of his plea deal, stating that Shrem had already, prior to learning of the suit, begun paying off this debt.

According to another document located by Ars Technica, the two sides will meet in court Nov. 8. Previously, Shrem had agreed to cap his spending at $50,000 per month and refrain from making any cryptocurrency transfers, restrictions which will be reevaluated after the hearing.

Read the full filing below:

Shrem Filing Nov. 5 by CCN.com on Scribd

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