The Winklevoss twins made a fortune off of their Facebook lawsuit in 2008, and now they’re doubling down with a big investment on an unproven commodity.
Tyler and Cameron Winklevoss, who worked with Facebook founder Mark Zuckerberg back at Harvard and made close to $148 million worth of stock when Zuckerberg developed the idea for himself, are now ready to go all-in on the Bitcoin.
The Winklevoss twins this week filed forms with the U.S. Securities and Exchange Commission to create a company called Math-Based Asset Services LLC. The point is to establish an exchange-traded fund for the online currency known as Bitcoin.
The twins admit that their resume as U.S. Olympic rowers and Facebook litigants doesn’t exactly qualify them to start an investment fund. The filing for their exchange-traded fund comes with some stark warnings for potential investors.
“As the Sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust,” they said in their filing.
The Winklevoss twins are determined to lead investors into the murky waters of Bitcoin investing. They’ve already jumped in, buying a stake in Bitcoin payment processor BitInstant.Together Cameron and Tyler already own 1 percent of all outstanding Bitcoins, worth close to $10 million, so they have a lot to lose.
But so do their potential investors. From the exchange-traded fund filing:”It may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoins in one or more countries, and ownership of, holding or trading in Shares may also be considered illegal and subject to sanction.”
There are also few retailers who accept Bitcoins for payment, though that number has been growing.
But experts still have grave concerns about the future of Bitcoins.
Alternative currency expert Steve Hanke noted that “[to] say highly speculative would be the understatement of the century” in regard to the Bitcoin.
Maybe the Winklevoss twins would be better off keeping their fortune and re-investing in Facebook.