Charlie Shrem has been called the “First Felon” of Bitcoin. Now he may add to his felonious reputation through a lawsuit initiated by the Winklevoss Twins, which claims that he embezzled money meant for early Bitcoin (BTC) investments.
Bitcoin Lawsuit Catalyzed By Shrem’s Streak Of Good Luck
The details of the lawsuit, as relayed by NYTimes, claims that Cameron and Tyler Winklevoss gave Shrem $250,000 to invest in BTC, but only received $189,000 worth of crypto assets. It is important to note that this was in 2012, which was when BTC was worth about $12.50 a pop.
The Winklevoss brothers now suspect that Shrem kept the remaining BTC in an undisclosed location, even as he served time in jail for knowingly helping consumers buy bitcoin for use in illicit markets.
Following his time in the slammer, Shrem claimed to be broke and even worked as a dishwasher for months before jumping back into the cryptosphere. Moreover, he was involved in some ICOs that fell through when planned partnerships never materialized.
Between the time he got out of jail and the time the lawsuit was filed, Shrem also amassed enough in physical assets to make the Winklevoss brothers suspicious.
“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 [us],” says the filed lawsuit.
That amount of bitcoin would be worth more than $32 million today.
Could Cause Setback in Shrem’s Plans for Crypto.IQ
If the lawsuit gains traction, it could cause issues for Shrem’s latest startup, Crypto.IQ. The company plans to hold a conference in Las Vegas to present its market intelligence platform. The lawsuit could divert Shrem’s time, attention, and resources away from the development of Crypto.IQ, which is starting to gain relevance in the competitive crypto industry.
A judge in the Federal District Court for the Southern District of New York has already agreed to a request issued by the Winklevoss Twins to freeze Shrem’s crypto holdings in Xapo and Coinbase.
According to an analysis of a deep dive into the Bitcoin blockchain, these funds may include some of the 5,000 bitcoin that was never delivered to the Winklevoss Twins.
Shrem’s lawyer, Brian Klein, disputes the allegations and the evidence against him in this case. “The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins. … Charlie plans to vigorously defend himself and quickly clear his name.”
Will the First Felon of Bitcoin be believed in this particular case? Given his track record and the immutable nature of the Bitcoin blockchain, the Winklevoss Twins may have the edge in this particular case.