How twins who sued Facebook cashed in on payout to become Bitcoin billionaires
Twin brothers who sued Mark Zuckerberg, claiming he stole the idea for Facebook, are worth more than $1bn (€840m) after capitalising on the astonishing rise in Bitcoin.
An $11m (€9m) bet on Bitcoin, made by Tyler and Cameron Winklevoss more than four years ago, has ballooned by almost 10,000pc after last week’s price surge. It is believed to be the first billion-dollar return made by a cryptocurrency investor, a landmark moment for the controversial asset.
Bitcoin hit $11,395 (€9,580)last week, capping a boom that started a year ago and accelerated dramatically in recent days, despite a chorus of warnings about its threat to financial stability and potential for criminal exploitation. The rise has made millionaires out of many of its early backers, but the Winklevoss twins are believed to be the first public figures to have turned an investment into more than $1bn.
The pair, who attended Harvard with Mr Zuckerberg, won a $65m (€54m) payout from Facebook in 2008, claiming he had stolen their idea. In March 2013, they used $11m of the settlement to buy roughly 1pc of the world’s supply of Bitcoin, when one coin was worth around $120 (€101).
The hoard has not been disclosed, but is estimated to be around 100,000 Bitcoins – worth more than $1bn at the cryptocurrency’s peak last week.
Since their clash with Facebook, the twins – who rowed for the US at the Beijing Olympics – have re-styled themselves as Bitcoin entrepreneurs, launching their own online exchange and venture capital fund.
The pair are believed to have held onto their Bitcoin investments in the hope of launching an exchange-traded fund in New York, although they have struggled to gain approval from financial regulators.
“We’ve never sold a Bitcoin, we’re in it for the long haul,” Cameron Winklevoss said two years ago.
Tyler Winklevoss, who has said the total value of the currency could be trillions, said last year that Bitcoin was “like a better version of gold”. A spokesman for the twins did not respond to requests for comment.
Only a handful of Bitcoin wallets have holdings worth more than $1bn, including the cryptocurrency’s mysterious inventor, who has never been unmasked and is known only by the online pseudonym Satoshi Nakamoto.
The Winklevoss twins are among the most high-profile of its big backers.
Bitcoin, which is not backed by any central bank but maintained by a network of its users, hit an all-time high last week, despite Lloyd Blankfein, the chief executive of Goldman Sachs, joining other financial heavyweights in dismissing it as a fraud.
The Federal Reserve also issued a warning that it could pose a risk to financial stability.
“While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage,” Federal Reserve governor Randal Quarles said.
Last week the Chicago Mercantile Exchange won approval to launch Bitcoin futures trading, and plans to offer contracts later this month.
The move is seen as a mark of legitimacy that could boost institutional interest in the virtual currency and boosted its price.
However, the cryptocurrency is still largely unregulated.