As CryptoGlobe reported last week, the Winklevoss twins have filed a lawsuit against Bitcoin pioneer Charlie Shrem, alleging that he stole 5,000 BTC that he was supposed to acquire and hold for them.

According to the lawsuit, the twins gave Shrem $1 million to invest in Bitcoin in 2012, which would have been worth $5000 BTC then, and roughly $32 million now.

On Monday (Nov 5th), Shrem responded to the allegations with court filings of his own, which stated that he fulfilled his end of the deal with the Winklevoss twins, and the blame lies with an associate who had control of the wallet after the initial investment was made.

Shrem named the associate in the court filings and provided e-mails as evidence, but that name was redacted in the documents that were released, as those details are sealed for the duration of the case. Shrem’s court filing stated that:


“The 5,000 bitcoins, which are the linchpin of WCF’s lawsuit, belonged to a prominent bitcoin industry member, who, to protect his privacy and for his security, will be called “Mr. X” in this brief. 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.”


Frozen Funds

The filings go on to question the basis for a freeze that the court put on Shrem’s funds, stating that Shrem is owed attorney fees and court costs for what his lawyers allege is a hasty and unjust judgement against him. The filing stated:

“Shrem engaged in no wrongdoing. Period. WCF’s motion to confirm the prejudgment attachment must be denied with prejudice, and the Court should award attorneys’ fees and costs to Shrem.The Court should also exercise its supervisory powers and dismiss the entire case at this time in light of its false premise and the unfair, significant disruption it has caused to Shrem’s life.”

The Winklevoss lawsuit claims that Shrem took the money and spent it on extravagant cars, boats, and properties. Shrem however, says that he has never touched the bitcoin after the initial transaction, and is working to pay off the money that he owes to the government as a result of his plea agreement. In a statement, Shrem said:

“After I was released from prison, I had a net worth of less than $100,000 and worked for approximately six months at a restaurant in Pennsylvania. Since working at the restaurant, I have worked a variety of jobs that have allowed me to accumulate funds and to restore myself financially.”

Shrem has had a number of prominent jobs since his release from jail, including positions with Dash (DASH), Cindicator (CND) and other blockchain companies.