Bitcoin’s ‘First Felon’ Faces More Legal Trouble | Hacker News Reader

Bitcoin’s ‘First Felon’ Faces More Legal Trouble

nytimes.com

93 pointsilamont49 comments

Ahhhh, yes, I remember Mr. Shrem. He acquired my Bitcoin company in 2012, we signed an acquisition contract and everything, and then he just never paid me and threatened me when I tried to collect (it was a five-figure sum). And to think I'd even helped him with his college math homework.

I’m hoping the contract’s execution was contingent on payment being received by you.

If only there was a currency that allowed that..

Good luck trying to code a few hundred years of common law into a smart contract.

Start with one step. Then take another. Step by step. Be not daunted.

It always is, at least in the US. See (the legal doctrine of) https://en.wikipedia.org/wiki/Consideration.

Specifically this part:

> Consideration cannot be illusory

A contract without consideration is void. If you promise to give someone X (that you own) if they give you Y (that they own), and you never give them X, then you don't own their Y, even if it's already in your possession.

You just (non-forcefully) stole their Y—same as if you e.g. asked to borrow someone's phone and then walked away with it.

> threatened me when I tried to collect

That part is not really clear. My understanding is that if he physically threatened you, you could file for a criminal case and he'll be in much deeper trouble than just not paying.

I'm curious. What sort of "company" is acquired for 5 figures? I assume that's in USD and not BTC.

Just a website where I sold people Bitcoins over the Internet in my spare time. I don't think the scare quotes are warranted, I had over $1 million in total volume and it was consistently profitable.

Did you take him to court over the issue?

Around 2012 was a very problematic time to take someone to court with respect to Bitcoin. This was right around the time the SEC and other agencies were beginning to treat cryptocurrency as a money / brokerage and wanting people to get licenses, whereas almost every operating Bitcoin company had no such licenses.

That sucks

He wrote a "Geek in Prison" series that was interesting:

https://medium.com/@cshrem

Thanks for that link - incredibly insightful.

> Throughout the day I kept checking the computer to see if the funds she added through Western Union were available yet.

This wait must have torn him apart.

Baffles me how Mr Shrem is held up as some Bitcoin martyr by those in the community even as late as yesterday.

Here's OpenBazaar's lead developer mentioning that Shrem went to jail because "Bitcoin is challenging the way money works in society". Shrem went to jail for laundering money for drug dealers. That's certainly one way of challenging how money works in society.

https://www.youtube.com/watch?v=zL9MkOGgVAQ

The Bitcoin community seems to have trouble choosing it's spokespeople. Remember Bruce Wagner?

https://www.metafilter.com/107065/Bruce-Wagner-and-the-Bitco...

I was invited to a house party at this guy’s place when he was under house arrest. I said no thanks.

The time line suggests this might actually be barred by the statute of limitations.

If so the case would be dismissed notwithstanding if the allegations are true.

Fishing expedition. The money probably isn't theirs (there are plenty of places Charlie could have made that money since release, given what he does and what he's been involved in), but on the off-chance it is, they may win OR get uncomfortably close in discovery to stuff he doesn't want light on, and he'll settle.

Why the hell would he be dumb enough to buy all this stuff in the US? At least go to a country where your assets won't get easily frozen, and where it's hard to extradite.

What an utter moron.

“Over the last year, Charlie Shrem, a 28-year-old Bitcoin investor, has bought two Maseratis, two powerboats — one of them 32 feet long — and a $2 million house in Florida, along with smaller pieces of real estate.

...

Mr. Shrem...has said in recent interviews that he went to prison with almost no money.”

What an idiot. Right out of jail, owes the feds hundreds of thousands of dollars, and can’t help but conspicuously consume.

I feel like buying a ton of stupidly expensive shit and having no cash on hand might somehow be related.

I’m somewhat disappointed that he didn’t buy any Lambos...

Yeah, Maseratis are the Volkswagen/Chrysler/Fiat of the super-car world.

Well, Maserati is actually owned by Fiat/Chrysler Group. Plus, like all F/C vehicles, they're pieces of shit. Maserati used to be nice. Now, they're sport cars for people who want a sport car but don't know anything about said cars.

Volkswagen is actually, despite their scandals, a remarkably good quality group. They own VW, Audi, Porsche, Lamborghini, and Bugatti.

> Porsche SE currently owns 50.73% of the voting rights in Volkswagen AG as the largest (controlling) shareholder.

> Porsche SE currently owns 50.73% of the voting rights in Volkswagen AG as the largest (controlling) shareholder

Porsche AG is a car maker [1]. Porsche SE is a family investment vehicle "owned by the Austrian Porsche and Piëch families" [2].

Porsche SE owns a majority of Volkswagen AG. Volkswagen AG owns Porsche AG. Family name versus car company name.

[1] https://en.wikipedia.org/wiki/Porsche

[2] https://en.wikipedia.org/wiki/Porsche_SE

Ferdinand Porsche designed the Volkswagen Beetle!

https://en.wikipedia.org/wiki/Ferdinand_Porsche#Volkswagen_B...

I own a 2013 Dodge Charger SRT (an FC brand). At $51k & 470hp out the door, it's the best performing and cheapest muscle car in its class. It can also seat my family of 4 comfortably. In 6 years and 42k miles, I've had zero drive train issues. Only problems I've had are suspension (I drive on pot hole ridden Chicago area roads) and tires worn prematurely due to bent suspension arms.

Dont know what your experience is with FC, but that's been mine.

Edit: math on years owned.

42k miles / 6 years is a barely used car. I would expect a post year 2000 car to go 150k, even 200k miles with no drive train problems assuming normal conditions. Also, the stats show Fiat/Chrysler experiencing the most problems:

https://www.jdpower.com/business/press-releases/jd-power-201...

https://www.jdpower.com/business/press-releases/2017-vehicle...

https://www.jdpower.com/business/press-releases/2016-us-vehi...

https://www.jdpower.com/business/press-releases/2015-vehicle...

Pretty consistently at the bottom year after year.

Not saying that Dodge doesn't make power. Mopar power is for sure a thing. The Demon and Hellcat in particular are awesome feats of engineering. Now they've come out with a 1000 HPE crate motor, too (the "Hellephant").

But F/C reliability, construction quality, etc. are known issues. As the other comment shows via JD Power rankings, F/C has poor QC. However, as those rankings show, Ford isn't amazing in that area either.

But, I'd challenge the "best performing and cheaptest" statement. The 2018/9 Ford Mustang GT peaks at 460 HP and 420 lb-ft of torque, starting at $35k. One could argue the new mustangs are less "muscle" and more "sport" cars, but I'd say it's still muscle.

p.s. I'm not affiliated with any automotive company.

not sure why you are being downvoted but this is essentially the truth.

https://www.youtube.com/watch?v=3QAHK1Uy9ao (this 2005 model is 20k vs a 2005 Ferrari F430 would fetch at least 100k)

It's like the C-class. Everywhere in Vancouver, BC. Especially downtown, where debt to income ratio is ridiculously higher than other areas.

People will pay for the brand, true supercar enthusiasts pay on future value. In fact, people who collect rare supercars, do not lose money on what is otherwise a known depreciating asset.

ex. F430 Manual transmission started appreciating in value past handful years because of demand for the last manual gated Ferrari, its approaching high-mileage 430 Scuderia prices, which is ridiculous. Everybody knows the Ferrari 430 Scuderia is the rawest Ferrari you can experience of last generation, even more expensive than a brand new 458.

I also think the F430 front and rear is the best looking. I died inside when they revealed those ugly sharp edges in the 458. Then the sacrilege of putting a turbo.

whew! I kinda went off on a tangent there. but yeah, tldr, parent comment is right and not deserving of downvotes.

Oh man, I thought cars were for driving, houses for living in, art for looking at, and Bitcoin was supposed to be a currency. No wonder I'm not rich; I've been doing it wrong this whole time!

Just think of all the value that you ate instead of saving in your fridge!

Excuse me, and with all due respect, but I think I should leave this here. "http://cars.mclaren.com/"

Florida's a great place to do this because of the bankruptcy homestead exemption:

> In bankruptcy, the Florida homestead exemption allows a primary residence of unlimited value to be protected from creditors as long as the debtor has lived in Florida for 40 months or more, and the property is not larger than half an acre in a municipality or 160 acres elsewhere

OJ Simpson used the same trick to prevent the Goldman family from getting his house.

that explains it. the humidity and fire ants suck though

> Mr. Shrem...has said in recent interviews that he went to prison with almost no money.

> Bitcoin

Please..

> two Maseratis

jesus christ. does this man have no taste? Maserati is the car poor people buy when they can't afford Ferrari in Vancouver, BC. Doug Demuro agrees.

I think it is a major flaw to assume someone's conspicuous consumption is from YOUR money.

This man has been in crypto for 8 years

Anyone that was there for the last 15 months could have made enough FROM SCRATCH to buy those things just trading. I've had hundreds of dollars of DUST in exchanges and wallets that I rediscovered were worth 6 figures, and at some points 7 figures if had checked. Even if the government had frozen some of my assets in connection with blah blah blah, I'd still have this stuff.

Add in advisory roles, salaries, the conference circuit, you might as well just fire your lawyer for coming up with that children's tale, and just stick to why someone might owe you money not "and here's proof they're the bad guy we must stop him NAO!"

His problem is that he said he was bankrupt when he went to prison. Not sure if he declared bankruptcy but...

Oh right, because saying "your are bankrupt" or actually declaring bankruptcy means permanently broke and living in public housing or under a bridge.

According to your story of events he would have had to say this in early 2015. He has been C-level at a hedge fund just a few months after getting out of prison in mid 2016.

And of course thats not how bankruptcy works at all.

This story is for extremely gullible and naive people, in order to try and get a summary judgement.

> because saying "your are bankrupt" or actually declaring bankruptcy means permanently broke and living in public housing or under a bridge

Mr. Shrem has "not paid the government $950,000 in restitution that he agreed to as part of his 2014 guilty plea" [1]. It's reasonable to expect him to not be purchasing "two Maseratis, two powerboats — one of them 32 feet long — and a $2 million house in Florida" while simultaneously launching "various partnerships...that had to give money back to investors" just a year out of jail.

[1] https://www.nytimes.com/2018/11/02/technology/bitcoin-charli...

oops, he should borrow against those and pay the government.

Did you even read the article? What I wrote is not my story or opinion, rather based on what is in the article.

The conspicuous consumption does make it easier to show that he has assets to pay them back if he does indeed owe them.

It doesn't really matter if his current wealth is a derivative of past dealings or recent success. He still owes those past debts unless he declared bankruptcy and they were discharged. It also sounds like the Winklevoss have some block chain evidence that his current wealth is related to long held Bitcoin.

Yeah, these are typical excuses used by crooks.

Unless your current debts have a payment plan set up, the priority is them.

the prevalence of the observation and who it comes from doesn't doesn't make it accurate or inaccurate

Reply on news.ycombinator.com