Charlie Shrem Rebukes Claims of 5,000 Bitcoin Theft, Claiming the True Owner was “Mr. X”

The battle between Charlie Shrem and the Winklevoss brothers continues. In this lawsuit, the Winklevosses accused Shrem of “stealing” 5,000 bitcoins in 2012, after yielding unsatisfactory returns. At the time, they had not pursued action, but the recent large purchases that Shrem publicized led them to believe that he had held on to their Bitcoin.

As Shrem and attorney Brian E. Klein have worked through the accusation, Klein recently responded formally on November 5th, saying that his client has “committed no misconduct.” In his filing, he added,

“Shrem can show by verifiable evidence that he did not take the 5,000 bitcoins (the Winklevosses) accuse him of taking.” Instead, Klein says that the funds actually belong to a “Mr. X,” and he has even gone as far as to call the lawsuit “nonsense.”

Part of the lawsuit is involving an intense look at the history of the last six years, starting with the initial contribution that the Winklevoss brothers made of $250,000. The funding was meant to help the twosome get involved with Bitcoin. They claim that $61,000 of their funds are missing, and that Shrem decided to use it in his own wealth instead. It is not surprising that they want the 5,000 Bitcoin now, considering that they would be worth over $32 million instead. In 2013, when the brothers suspected something suspicious was going on, Cameron wrote an email to Shrem, saying, “I have been patient, and at this point it’s getting a bit absurd […] I don’t take this lightly.”

Shrem went to prison for unrelated charges in 2015, when he claimed that he had absolutely no money. He pled guilty to knowingly selling cryptocurrency, despite knowing that the buyers intended to use it on a dark web marketplace to purchase drugs. Once out, he acquired some lavish purchases, even though he said that he was only working as a dishwasher with a few BTC under his belt. However, he claimed to not have held onto the cryptocurrency, because he could not “speculate with [his] rent.”

However, as the lawsuit against him reads,

“Either Shrem has been incredibly lucky and successful since leaving prison, or — more likely — he ‘acquired’ his six properties, two Maserati’s, two powerboats and other holdings with the appreciated value of the 5,000 Bitcoin he stole.”

When Cameron Winklevoss spoke with the New York Times, he commented that the purchase made himself and his brother realize that it was time to do some digging.

The Winklevoss twins decided to hire a private investigator that was able to track down a bitcoin wallet that was linked to Shrem. The transaction happened around the same time that the funds went missing, though Shrem ended up moving the majority of these coins to Coinbase and Xapo. The twins now believe that their 5,000 Bitcoin has been responsible for purchasing millions of dollars’ worth of real estate and other luxuries.

The judge on the case, who happened to preside when Shrem got into trouble three years ago, agreed to freeze the funds that Shrem is holding at both Coinbase and Xapo. The judge, Jed S. Rakoff, noted in his official order that Shrem “evidenced an intent to frustrate the collection efforts of his creditors.”

If the case continues on the track it has been on, it seems likely that the Winklevoss twins will win the case. In the meantime, Klein continues to be aggressive in his work to relieve Shrem of the lawsuit. When speaking with the New York Times, Klein said,

“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.”

So far, despite requests from CoinTelegraph, Shrem has not provided any other statements. To view the full filing for this case, visit

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