BitInstant former CEO Charlie Shrem actions as the Crypto adviser to twins Tyler and Cameron Winklevoss have come back to haunt him in a lawsuit. The twins are alleging that during his contract as their adviser in 2012 Shrem didn’t give them all the Bitcoins according to their investment.
According to the New York Times, the twins gave $750,000 and $250,000 to Shrem for him to invest in Bitcoin on their behalf. At that time one bitcoin was worth 12.50 dollars. But today, the value has appreciated significantly. Per the lawsuit, the twins claim they are short of 5,000 Bitcoins which in the current market is worth $32 million. It’s from the latter amount that the twins claim they didn’t receive the real value of their investment. The lawsuit was filed in September, but the contents of the case got in the public domain recently.
Twins Claim Strem Used Their Money to Buy His Recent Properties
Mr. Stern woes started when he was sentenced to a two-year jail term back in 2014 for violating money laundering laws. He was found guilty of working with Robert Faiella who provided $1 million in cryptocurrency to people buying drugs on Silk Road an online market. Shrem went to jail in 2015 March but only served one year after agreeing to forfeit $950,000 to the US government.
It is after walking out of prison that Shrem began purchasing properties in different locations. However, in an interview, Shrem said he went to jail with almost nothing in his accounts. But upon his release, he started buying properties. It is his recent purchasing power that raised questions leading to the Winklevoss twins filing the court case. For a person who went to prison with almost nothing, he seems to have walked out richer.
According to the lawsuit the twins claim;
“There are two scenarios here one it’s either Shrem is lucky and successful, or he acquired the said properties through the proceeds of our 5,000 Bitcoin which have appreciated.”
After his release, Shrem bought six properties which include a $ 2 million property in Florida, two powerboats with one 32feet long, two Maserati’s and other small holdings in real estate. For a person who was in prison, it raises a lot of questions. For the twins, they want to know where the funds came from.
With all the above properties in his name, Shrem has not even paid the $950,000 fine to the government. His actions have led to the judge who presided over the previous case to freeze some of his assets.