Winklevoss Twins Lose First Round Against Shrem in Court

Winklevoss Twins Lose First Round Against Shrem in Court

The plot thickens between the Winklevoss/Shrem saga. In the latest chapter, the twins have ended up in last place during the first round in court.

Assets Unfrozen

In an update to the case, the twins have lost the first round against Shrem in court. In a report from Bloomberg, it seems that a judge has put an end to Shrem’s asset freeze, which was in place last month before Shrem found out about the lawsuit.

Earlier this month, it was reported that the Winklevoss twins were suing Charlie Shrem, former CEO of BitInstant, for allegedly stealing 5,000 bitcoins. At the time, in 2012, they were worth around $61,000. At today’s valuation, those bitcoins are valued around $32 million.

Shrem, who spent a year in prison for helping people purchase drugs on Silk Road with Bitcoin, has denied he stole anything. Prior to going to prison, Shrem claimed that he had no money in his pocket. However, according to unsealed court documents, the current lawsuit states:

…he ‘acquired’ his six properties, two Maseratis, two powerboats and other holdings with the appreciated value of the 5,000 Bitcoins he stole.

Earlier this week, Shrem’s lawyer, Brian E. Klein, responded to the allegations from Tyler and Cameron Winklevoss. In a document, Klein stated that the 5,000 bitcoins never belonged to the twins, but belonged to a “prominent Bitcoin industry member who, to protect his privacy and for his security, will be called ‘Mr. X’.”

He went on to say:

Mr. X is identified in e-mail communications between him and Shrem (and others) discussing the 5,000 Bitcoins, an unredacted copy of which has been filed under seal. Shrem merely, as a favor, electronically transferred 5,000 Bitcoins for Mr. X. to a cold storage wallet account at Mr. X’s request on December 31, 2012.

Tyler Meade, an attorney for the Winklevoss brothers, has argued that the freeze should continue. In order to determine the provenance of the assets, the twins’ lawyer has requested information from 30 institutions. However, as Bloomberg points out, it has only identified $10 in assets so far.

Klein claims that most of Shrem’s holdings are in real estate. Additionally, he argues that the value of his crypto assets has “shrunk dramatically.”

A trial is scheduled for the 17th of June.

It remains to be seen what the outcome will be, but for now, it’s unlikely that either side is going to give up easily.

What do you make of the saga? Do you think Shrem has anything to answer for? Let us know in the comments below.

Images courtesy of Shutterstock and Wikimedia Commons.

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