Monday, April 22, 2019

Twins Bitcoin Billionaires Sue Crypto Pioneer, Charlie Shrem

The twins billionaires, Cameron and Tyler Winklevoss, are popularly known as, the “first bitcoin billionaires”. In 2014, they were in a legal battle against Facebook for ownership and recently, they have filed a lawsuit against the 28-year-old bitcoin investor and founder of Bitinstant, Charlie Shrem.

It is believed that the twins wealth in cryptocurrency is as a result of their $11 million investment into bitcoin in 2013, which was valued at $120 per coin. The capital used for this investment was part of the $65 million they had received in 2008 as a settlement in their lawsuit against Facebook.

Shrem, on the other hand, may be described as, “the first Bitcoin felon,” after doing time in a Federal prison. In 2014, he was jailed for selling Bitcoins to people who had the intention of buying illegal drugs with it from the Crypto forum, Sail Road. Two years after his release, Shrem was able to acquire multiple real estate properties, a $2 million house in Florida, Maseratis and powerboats.

Admittedly, the lawsuit stems from Shrem’s purchases and affluent lifestyle over the past year. According to the Harvard University-educated brothers, Shrem who was once their business partner in 2012, stole 5,000 bitcoins from them which were worth $60,000 ($12.50 each). As at today, that amount of bitcoins is valued at around $31 million.

A part of the court report stated that,

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.

Based on these allegations, the US District Court Judge Jed S. Rakoff has granted the twin’s request to freeze Shrem’s digital assets which are held on Xapo and Coinbase crypto exchanges. These exchanges are believed to hold part of the bitcoins that was stolen from the twins years ago.

Brian Kien, who is Shrem’s lawyer, said that the allegations made by the brothers could be far from the truth and that Shrem will soon be proven innocent in court. He also said that the twins have erroneously made the allegations and that he was ready to defend his client in court vigorously.

The twins private Investigator believes that the transactions for the stolen coins are traceable on a public ledger. This is because the bitcoins were sent to Bitcoin addresses which Shrem had access to before they were later moved into other wallets. Therefore, the details of such transfers could be found on the Blockchain.

This may not be the only problem Mr Shrem will have to deal with since there is an affidavit filed in the court which states that he currently owes the government $950,000 in restitution, which he agreed to pay in 2014, as part of his plea bargain.

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