Are the Winklevii still BitInstant investors?January 27, 2014: 2:36 PM ET
The Winklevoss twins invested in BitInstant. What happened next? This is not a rhetorical question.
FORTUNE -- In late 2012, Tyler and Cameron Winklevoss led a $1.5 million seed investment in BitInstant, an online trading platform for Bitcoin. Today, that company's CEO, Charlie Shrem, was indicted by the Feds for allegedly laundering more than $1 billion of Bitcoin for customers of digital drug bazaar Silk Road.
Not surprisingly, the self-professed Facebook co-founders were quick to issue a statement:
When we invested in BitInstant in the fall of 2012, its management made a commitment to us that they would abide by all applicable laws - including money laundering laws - and we expected nothing less. Although BitInstant is not named in today's indictment of Charlie Shrem, we are obviously deeply concerned about his arrest. We were passive investors in BitInstant and will do everything we can to help law enforcement officials. We fully support any and all governmental efforts to ensure that money laundering requirements are enforced, and look forward to clearer regulation being implemented on the purchase and sale of bitcoins.
What's notable about this statement is the use of past tense: "Were passive investors" (my emphasis).
BitInstant remains a privately-held startup and has not announced any subsequent funding. So why are the Winklevii not still investors? Were there some sort of redemption rights on the preferred shares that the twins exercised? If so, when? And why? Or was this simply a reference to the fact that BitInstant is now down and, for all intents and purposes, defunct?
We've reached out for comment, and will update this post if they reply.
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