Cameron and Tyler Winklevoss won’t get a single bitcoin from Charlie Shrem.
The Winklevoss twins’ lawsuit against Bitcoin pioneer Shrem has been dismissed with prejudice and will not be reopened, according to a court order filed on Tuesday.
The Winklevii sought 5,000 bitcoins (worth approximately $32 million at the time the lawsuit was filed) from Shrem, who spearheaded some of the first unregulated Bitcoin exchanges and spent a year in jail for aiding and abetting the dark web, black-market Silk Road. The lawsuit’s dismissal follows a confidential settlement between the two parties, which was preceded by a series of court orders within the last few months that indicated the case was heading Shrem’s way.
The Winklevoss twins filed their lawsuit against their former business associate last September, alleging a theft of 5,000 bitcoins. According to their complaint, the Winklevoss Capital Fund hired Shrem as a crypto advisor in 2012, and asked him to buy bitcoin on their behalf.
The lawsuit claimed Shrem was given $750,000 to purchase the coins but ripped off the twins along the way, keeping 5,000 of those bitcoins for himself.
Shrem tells Decrypt that the lawsuit’s dismissal is vindication of his proclaimed innocence: “From day one, I’ve maintained the allegations are bogus, and they are of course,” Shrem says. “After their attorney was sanctioned and they were ordered to pay my legal fees twice, we recently reached a confidential resolution, and I’m dismissed from the case. I’m thankful for Brian Klein and my legal team and pleased to have this behind me.”
Indeed, a swift reversal of fortune on the part of the prosecution quickly led to the Winklevii’s case fizzling to nothing.
“This was a case that began with the plaintiffs trying to freeze and seize Shrem's assets before he even knew that he had been sued,” Stephen Palley, a blockchain focused lawyer at Anderson Kill, tweeted.
“It went from there to worse for the plaintiffs lawyers, who saw that ruling over-turned and ended up being sanctioned for deposition misconduct.”
Palley also noted that the Winklevii’s lawyer was ordered to pay a $15,000 deposition for misconduct. “It's hard to know if that led the case to finally go the way of all flesh but the defense played for keeps and won,” he wrote.
Additional reporting by Ben Munster.