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The founders of Gemini's digital asset trading platform accused their former trading partner of not returning the bitcoin that they had ordered him to buy on their behalf in 2012. The twins from Winklevoss claim that Charlie Shrem owes them BTC 5,000.
Charlie's lavish lifestyle spurred legal action
Charlie Shrem might have had the chance to get into Bitcoin earlier, but his chance to stay on the right side of the law is certainly more debatable.
The crypto-entrepreneur, who served in 2014 for knowingly giving people the means to buy dark web-based drugs with his Bitinstant payment processing service, has again faced legal difficulties.
The lawsuit filed yesterday by former Shrem partners in the federal government dates back to 2012, when the Winklevoss twins lent Charlie $ 750,000 for the legendary source of Bitcoin. Shrem managed to convince the brothers of the importance of Bitcoin and its validity as an investment – by serving as an advisor to the pair from the beginning. They allege that he did not return the correct number of Bitcoin from the transaction and that 5,000 were left behind.
After the twins realized that their balances did not match, the court documents indicate that they repeatedly asked for the return of the missing Bitcoin. An email between Cameron Winklevoss and Shrem said:
"I've been patient and at this point, it's getting a bit absurd. I do not take it lightly. "
According to an article in the New York Times, it seems that Shrem is fighting against the charges against him. His lawyer, Brian Klein, refuted his client's claims in a statement:
"The lawsuit falsely claims that about six years ago, Charlie hijacked thousands of Bitcoins. Nothing could be further from the truth. Charlie plans to defend himself vigorously and quickly clarify his name. "
Charlie's latest legal concerns may be about to make him fall into even warmer water. According to a court file, the first Bitcoin investor still owes the government $ 950,000 for the conviction of Bitinstant. Of course, this should be raised again in the Winklevoss case.
Apparently, Cameron and Tyler were inspired by Shrem's pursuit of Bitcoin, worth about $ 32 million, after observing his recent spending habits. Although he stated that he was bankrupt when he went to prison, Charlie managed to buy for $ 4 million worth of real estate, a pair of Maserati and two boats recently. The lawsuit states:
"Either Shrem has been incredibly lucky and has succeeded since his release from prison or, more likely, he has" acquired "his six properties, two Maserati, two motorboats and other assets with the appreciated value of the 5,000 Bitcoin that 'he stole.'
Since an investigator hired by Winklevoss' twins discovered that Shrem had used the Xapo and Coinbase portfolios to deal with the stolen Bitcoin, New York Federal Judge Jed S. Rakoff authorized the freeze of all assets held by Shrem from both companies.
However, it's hard to know how much Bitcoin the former Bitinstant CEO holds from these services.
Selected image of Shutterstock.
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