Judge to Winklevoss twins: You can’t seize $31M in allegedly stolen assets

Enlarge (credit: Peter KovalevTASS via Getty Images)
A federal judge overseeing the lawsuit filed against Charlie Shrem, a well-known Bitcoin investor who previously served prison time for unlicensed money transfers, ruled Thursday that Winklevoss Capital Fund cannot immediately garnish more than $31 million of his assets.WCF, founded by the twin Winklevoss investors, alleged in a new lawsuit that nearly six years ago, they hired Shrem to purchase bitcoins on their behalf. While doing so, Shrem allegedly spirited away 5,000 bitcoins now worth over $31 million at current exchange rates. Shrem, through his attorney, has denied any wrongdoing.Brian Klein, Shrem’s lawyer, emailed Ars on Thursday evening to say that he was satisfied with the judge’s ruling.“We are very pleased the judge ruled in Charlie’s favor, dissolving the $30 million plus attachment order, after he heard extensive argument from both sides earlier today,” he said. “This is an important first step towards his complete vindication.”Klein had previously argued in court filings that WCF's arguments should fail for two primary reasons: first, Shrem did not own the 5,000 bitcoins in question. As the then-CEO of BitInstant, Shrem was actually transferring them on behalf of a mysterious investor referred to as 'Mr. X.' It was this investor's bitcoins that Shrem claims he transferred into 'cold storage,' a way to preserve bitcoins in an offline wallet.Second, WCF's lawsuit should have been brought under the relevant legal time limits of within two years of the discovery of the alleged fraud. Here, Cameron Winklevoss claimed in court papers that he 'confronted' Shrem in January 2013.In a separate order, US District Judge Jed Rakoff ruled Thursday that “Mr. X” should be referred to from now on as “John Doe' and set up a timeline for the case to proceed into next year, moving toward a possible late spring 2019 trial date, unless the case settles first.

Read on Ars Technica | Comments