Explanation Of Reversing Court Order Against Charlie Shrem Suggests “Judgement Proof” Assets Will Stay Out Of New York

The battle between the Winklevoss brothers and Charlie Shrem has been going on for too long. Just two weeks ago, The Block reported about a setback that the case sustained, despite starting off in high gear. Overall, the goal has been for Shrem to transfer the brothers’ missing Bitcoin back to their account.

The Winklevosses started strong when they had a victory over Shrem as the judge accepted a prejudgment attachment to freeze Shrem’s assets. However, this occurred before the case even began in the first place, which is what made it such a bold move and a bad sign for Shrem. However, the setback came when the order was reversed with no explanation. The Block obtained a copy and there seems to be three reasons that contributed.

First, the plaintiff started off by saying that Shrem’s former restitution from an unrelated criminal conviction had yet to be paid, which suggested that he would avoid payment. When Shrem countered that there had been no schedule established by the government, the Court said that there was no way to imply such an action.

Next, the plaintiff said that Shrem intentionally avoided accounting for the money owed to the plaintiff in another effort to evade payment to creditors. The “circular argument” was rejected, and the Court said,

“Plaintiff’s imputations that fraudulent activity and intent explain defendant’s financial success following his release from prison, his decision to move to Florida, and his decision to continue investing in cryptocurrency (as he has always done) are, at most, ‘allegations raising a suspicion of intent to defraud.”

The third issue was that the plaintiff claimed that “Defendant’s assets ‘are largely beyond grasp,” as they are in cryptocurrency investments or in a primary residence in Florida, which may be judgment-proof,” in the court documents. However, this argument failed to be accepted by the court either. However, while the Court recognized that some of his assets are in cryptocurrency, which “does not make them judgment proof.”

Though there was no explanation here, The Block notes, “the contempt power would be one remedy available to the Court in a post-judgment collection proceeding, and the Court is well aware of that fact.”

Overall, having any kind of prejudgment entered by the court against Shrem was over the top. Even though the brothers had a good enough argument to get the order originally, it is clear that the Court was not persuaded that there was enough reason to keep it in place.

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