The Winklevoss Twins have long been prominent in the cryptocurrency space. Their most notable contributions have been the Gemini exchange and its dollar-backed Gemini Dollar (GUSD) stablecoin.

The twins are now accusing Charlie Shrem, whom they partnered with in their early forays into cryptocurrency, of stealing 5,000 Bitcoin from the pair. Allegedly, the two asked Shrem to purchase the assets for them back in 2012, and he has yet to return them, according to a report from The New York Times.

This accusation isn’t Shrem’s first sketchy crypto situation either. Known as Bitcoin’s “First Felon,” Shrem went to jail in 2014 for helping people convert their funds into Bitcoin to buy drugs.

Shrem has revealed in recent interviews that he had went to jail with next to nothing in his bank account. However, the past year has seen him purchasing millions in property alongside two Maseratis and some powerboats. While Shrem was once the CEO of Bitinstant, an early U.S. Bitcoin business, he didn’t have millionaire money to throw around.

The Winklevoss twins are aware of his lack of funds, hence the lawsuit against him. One part of the accusation reads:

“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.”

The judge involved with Shrem’s earlier accusations has agreed to freeze some of his funds. However, there may be more to the story. According to an affidavit, Shrem has also failed to pay a $950,000 government fine from his 2014 arrest.

Shrem’s lawyer, Brian Klien, claims that the accusations are entirely false:

“The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of Bitcoins. Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”

Despite these accusations, Shrem has revealed via multiple interviews and even podcasts that he wants to go straight. The felon revealed that he worked as a dishwasher after getting out of prison, and refused to check his emails during that period.

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In 2012, the brothers provided Shrem with $750,000 to purchase Bitcoin from other investors. Yet, only a couple of months into this partnership, the shady entrepreneur had not returned all of the funds. Come October, Shrem had returned $189,000 worth of Bitcoin from the Winklevoss twins’ funding of $250,000 the month before. At that time, the two had asked for the money back quite often.

A 2013 e-mail from Cameron Winklevoss to Shrem reads, “I have been patient, and at this point it’s getting a bit absurd. I don’t take this lightly.” During the time of this email, Bitcoin was only worth $12.50. That number has risen significantly since, with the asset price at $6,351 as of this writing.

The twins are also after Shrem over their investment in Bitinstant. The company went under in 2013, and the two prevented their former partner from doing anything with the idea. They’ve since cut contact with him until now.

What brought the Winklevosses back was Shrem’s spending patterns, says Cameron:

“When he purchased $4 million in real estate, two Maseratis and two powerboats, we decided it was time to get to the bottom of it.”

According to a hired investigator, Shrem had transferred 5,000 Bitcoins through Xapo and Coinbase back in 2013. This data was revealed on the Bitcoin blockchain, which enables anyone to trace transactions back to their first point.

Recently, Shrem has gotten involved with Crypto.IQ — a group looking to provide Bitcoin market info to traders. However, these lawsuits are likely to cause trouble for his new venture. Judge Jed S. Rakoff, who froze Shrem’s funds after the allegations, is claiming the entrepreneur had “evidenced an intent to frustrate the collection efforts of his creditors.”

The post Winklevoss Twins Accuse Bitcoin’s “First Felon” Of Asset Theft appeared first on UNHASHED.

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