Winklevosses' Adversary Calls Bitcoin Theft Claim ‘Scandalous’

(Bloomberg) -- The disgraced former chief executive of BitInstant called a lawsuit by Tyler and Cameron Winklevoss’s Winklevoss Capital Fund a "scandalous and fantastical story," and urged a U.S. judge to throw it out.

The Winklevosses claim that Charles Shrem used part of their 2012 investment of $750,000 in BitInstant to buy 5,000 bitcoins, then priced at $61,000, for himself. The bitcoins would be worth $32 million today. The Winklevosses sued in September accusing Shrem of fraud.

Winklevosses' Adversary Calls Bitcoin Theft Claim ‘Scandalous’

Shrem responded Monday in papers filed in Manhattan federal court claiming the 5,000 bitcoins were the property of a "prominent bitcoin industry member," whom he identified only as "Mr. X." Shrem says he never owned the bitcoins.

The Winklevosses, who got a freeze on Shrem’s assets before he found out about the lawsuit, also agreed on Monday that he will be allowed to spend up to $50,000 a month on living expense and the deal will be reevaluated at a Nov. 8 court hearing, according to a letter from Shrem’s lawyer.

Shrem spent a year in prison after pleading guilty to helping people use Bitcoins to buy drugs. He was released in 2016.

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