The Ultimate Resource On The Ira Kleiman vs Craig (#Faketoshi) Wright Lawsuit (#GotBitcoin?)
Craig Wright appears to have briefly forgotten that he wrote the Bitcoin white paper while speaking at a recent conference in Toronto. The Ultimate Resource On The Ira Kleiman vs Craig (#Faketoshi) Wright Lawsuit (#GotBitcoin?)
Wright, lead brain behind alternative cryptocurrency Bitcoin Satoshi Vision, caused controversy earlier this year after suing community members who refused to acknowledge that he created Bitcoin under the Satoshi Nakamoto pseudonym.
An eagle-eyed Twitter user shared a clip from Wright’s presentation, in which Wright (hilariously) says the following as part of a “bit.”
… there’s this whole section, I remember some white paper, um, back in 2008, had this section on how identity worked in Bitcoin.
I remember reading it… probably when I wrote it... and there was this different way of doing things …
In April, Wright commenced legal action against those who had repeatedly called him a fraud on social media. Bitcoin podcaster Peter McCormack and Twitter-based cartoon space-cat “Hodlonaut” were the first targets.
Lawyers representing Wright later sent legal notices to Ethereum co-founder Vitalik Buterin, Blocksteam CEO Adam Back, as well as two independent cryptocurrency news outlets.
The letters demanded recipients retract any statements that claim Wright is a fraud, and even appear in court to declare they were wrong to do so all along.
Wright’s ordered to appear in court himself next week over a separatelawsuit lodged by the estate of Dave Kleiman, a computer security expert who (some believe) played a key role in Bitcoin‘s creation.
It’s alleged Wright stole 1.1 million BTC ($9.2 billion) from Kleiman’s estate after he passed away, and must now produce evidence of all the Bitcoin he’s ever mined — which would include at least some of that supposedly stolen cryptocurrency.
In November 2008, someone named Satoshi Nakamoto published the Bitcoin white paper. They maintained an online presence until December 2010, when they disappeared from the internet altogether. Bitcoin’s development continues without their input.
For those that may think this video might involve some deep fake tomfoolery: you can check out Wright’s “presentation” in full, direct from the source. He “forgets” that he’s Satoshi at approximately 5:00, enjoy!
Self-Proclaimed Bitcoin Creator Craig Wright Committed Fraud According To Florida Court Documents
Craig Wright, the controversial creator of Bitcoin SV claiming to be Satoshi Nakamoto, could be facing jail time for fraud. Documents from a Florida court proved that Wright committed perjury, as his defense contradicts an affidavit he previously submitted to an Australian court.
Wright summoned to appear in court, documents reveal he allegedly committed fraud
Craig Wright, the chief scientist at nChain and self-proclaimed Satoshi Nakamoto, shows no signs of stopping. After invoking the ire of the crypto community by suing UK podcaster Peter McCormack for libel, Wright went on to focus on a much bigger legal battle he faces in the United States.
Namely, Wright has been embroiled in a lawsuit with Ira Kleiman, brother of the late David Kleiman, who he claims helped him develop Bitcoin. Kleiman sued Wright for allegedly stealing 1.1 million BTC from W&K Info Defense Research, a company Wright and David Kleiman founded and operated.
After refusing to reveal his Bitcoin holdings and appear in front of a judge, the Southern District of Florida court ordered him to appear at mediation on Jun 18 to address the allegations against him. Wright previously filed a motion to postpone the case and be allowed to attend the mediation through video conference. The motion was rejected by the U.S. District Judge Beth Bloom.
However, the court documents also revealed that Wright has committed fraud, for which he could face up to five years in prison and various fines. According to the documents, after being accused of stealing over $11 billion worth of BTC, Wright “filed a sworn declaration that is incontrovertibly false based on an affidavit and supporting evidence he previously submitted to an Australian court.”
Wright allegedly lied about his involvement in a Florida company he and Kleiman owned
The lawsuit against Wright alleges that he and Dave Kleiman mined over 1.1 million bitcoins through their jointly owned company called W&K and that after Kleiman’s death, Wright took unlawful possession of all the bitcoins and intellectual property of the company.
After receiving a complaint from Ira Kleiman and the Kleiman estate, Wright filed a motion with an Australian court saying he had no connections to Florida or W&K. He then supported these claims with a sworn declaration stating he was never a shareholder, member, agent, employee, or representative of W&K.
But, most importantly, he swore, under penalty of perjury under the laws of the United States, that he’d never exercised authority or control over W&K.
However, it was found that Wright submitted an affidavit to the Supreme Court of New South Wales, where he confirmed that he owned 50 percent of W&K Info Defense LLC, while Kleiman owned the other 50 percent.
He then doubled down, saying that “W&K Info Defense LLC was an incorporated partnership” and that “all shares are held jointly.” According to the court documents, Wright also said he called a “shareholders meeting” in 2013, where he was the sole vote that nominated the director of the company.
The affidavit directly contradicts sworn statements Wright had made to the court in Florida, where he asserted that he had never been a shareholder or a member of W&K and that he never exercised any authority or control over the company.
Documents which Wright signed as the “authorized representative” of W&K were revealed, as well as multiple occasions on which he identified himself as the lead researcher of the company.
The crypto community has responded strongly to these new developments, with many coming up with further evidence showing Wright contradicting himself on various occasions. Others have come up with their own theories on why he claimed to be Satoshi Nakamoto in the first place.
Craig Wright Ordered To Personally Appear At Bitcoin Theft Mediation
Craig Wright has been ordered to appear personally at mediation to address allegations that he stole 1.1 million bitcoin (BTC) from Dave Kleiman, court documents filed on June 10 show.
The Australian entrepreneur had requested permission to appear by videoconference, arguing that physically attending the courtroom would have caused him “unjustifiable hardship.”
However, his motion was opposed by the plaintiffs, who argued that the discovery already performed so far in the case delivered “sufficient information to fairly evaluate the claims at issue.” The court sided with the plaintiffs, with Judge Beth Bloom ruling:
“Personal appearance by the parties will promote meaningful participation at mediation.”
As a result, Wright has now been ordered to attend the next mediation session on June 18.
He is accused of stealing bitcoin from the estate of Kleiman, a crypto developer who passed away in 2013. Kleiman’s family allege that up to 1.1 million BTC was taken, which would be worth just shy of $9 billion at press time.
Wright has made repeated requests to have the lawsuit dismissed, but back in December, Judge Bloom ordered that the case should proceed.
Last month, Wright filed United States copyright registrations for the Bitcoin white paper authored by Satoshi Nakamoto, attracting controversy from commentators.
Although the computer scientist has long claimed to be Nakamoto, a subsequent report by the Financial Times suggested that Wright’s registrations do not mean his claims are recognized by the U.S. government.
Craig Wright Offers New Details On Bitcoin Trust At Heart Of Billion-Dollar Lawsuit
New details have emerged in the ongoing lawsuit in the U.S. filed last year against Craig S. Wright, the technologist who claims to be the pseudonymous creator of bitcoin, Satoshi Nakamoto.
A redacted declaration filing from Kleiman v. Wright surfaced today, which details Wright’s purported ownership and the trustee scheme of the Tulip Trust, which supposedly holds over one million bitcoin. According to the filing, access to the holdings of the trust requires participation of all trustees, at least one of whom he hasn’t been in contact for several years.
The court document was originally filed on May 8, and also points to the existence of a second Tulip Trust, known as Tulip Trust II.
Days before the document was filed, a federal court ordered Wright to disclose his bitcoin addresses in the ongoing lawsuit. Wright is being sued by Ira Kleiman on behalf of the estate of his brother, the late Dave Kleiman. The nChain chief scientist is accused of scheming to “seize Dave’s bitcoins and his rights to certain intellectual property associated with the bitcoin technology.”
Kleiman is seeking half of the 1.1 million bitcoins the two are said to have mined together, or its “fair market value,” as well as compensation for infringement of intellectual property. The initial complaint did not seek to ascertain whether Wright is the person behind the Nakamoto identity, stating that “it is unclear whether Craig, Dave and/or both created Bitcoin.”
According to the declaration released Thursday, the Tulip Trust consolidated the bitcoin Wright mined and purchased between 2009 and 2011.
The trust first came to public attention through a leaked document on December 9, 2015. Allegedly written in 2011 by Dave Kleiman, a forensic computer investigator and author, the document describes a trust fund containing exactly 1,100,111 bitcoin, “to be managed by at least three people but not more than seven at any time.” The document also declares the bitcoin holding is to be returned to Craig Wright on January 1, 2020.
These new developments come amid an ongoing mediation process, which as of June 18 has yielded no results — in the words of the mediator, as reported by attorney Stephen Palley, “we are at an impasse.”
As it stands, Wright is due for deposition in Florida on June 28.
According to Wright’s court declaration, seven trustees were named, including Craig Wright, David Kleiman, and Ms. Uyen Nguyen — whom Wright claimed he has had no contact with since 2016. That said, Kleiman was the initial, and sole, trustee before others were appointed.
Panopticrypt Pty Ltd, an Australian entity now in liquidation was also named alongside an unnamed Seychelles entity and CO1N Ltd., a U.K. entity liquidated in 2017.
“The contacts at CO1N were Dave Kleiman and Ms Nguyen, who was terminated as director on June 1, 2016. Presently, there is no one other than myself who was a contact for this entity.” Nguyen was allegedly terminated as director of CO1N in June 2016.
The final trustee listed is “the holder of PGP key IDs, which is Satoshi Nakamoto,” with Craig Wright parenthetically related.
In the past, Wright has said that the trust is encrypted using a a method called Shamir’s Secret Sharing Algorithm. The only way to access them, he’s said, is to accrue the collective private keys in order to decrypt it.
Wright complied with the directive pursuant to a court order to produce bitcoin holdings for all bitcoin Wright mined prior to December 31, 2013. The filings were subsequently sealed.
The Tulip Trust II was settled in 2014 in Seychelles with Equator Consultants listed as a trustee. Wright and his wife Ramona Watts are the primary beneficiaries. The holdings of this second trust are unknown.
Wright also hinted at an inaccessible trove of bitcoin mined between 2011 and 2013 by staff at HighSecured and Signia Enterprises under his direction, to be held on behalf of the original Tulip Trust. Wright alleges the principles of HighSecured were arrested in 2015.
Wright has claimed in the past the Tulip Trust is currently inaccessible. In the court document Wright said:
“Access to the encrypted file that contains the public addresses and their associated private keys to the Bitcoin that I mined, requires myself and combination of trustees reference in Tulip Trust I to unlock based on Shamir scheme.”
Dave Kleiman passed away in 2013. Last December, the court denied Wright’s attempt to dismiss the lawsuit, saying that he “converted at least 300,000 bitcoins upon Dave’s death and transferred them to various international trusts.”
The court filing can be found below
Wright Has Not Disclosed Full Bitcoin Holdings Per Court Order, Says Plaintiff’s Representation
A new development in the Kleiman v Wright lawsuit was announced today as a member of the plaintiff’s representation disclosed that Wright has not complied with a court directive to list his bitcoin holdings prior to December 31, 2013.
A show cause hearing will follow next week, and Wright may be held in contempt of court at either the civil or criminal level.
Velve Freedman of Boies Schiller Flexner LLP the firm representing plaintiff Ira Kleiman tweeted:
Florida judge Bruce Reinhart had ordered Craig Wright, who claims to have invented the bitcoin software, to disclose his bitcoin addresses in an ongoing lawsuit filed by the estate of his former business partner, David Kleiman.
Ira Kleiman, Dave’s brother, on behalf of the Kleiman estate accused the Australian entrepreneur of scheming to seize a shared holding of bitcoin the two mined together between 2009 and 2011, as well as Kleiman’s intellectual property. The plaintiff seeks the return of half of a 1.1 million bitcoin stockpile, allegedly held in the “Tulip Trust,” which Wright claimed consolidated bitcoin he mined and purchased between 2009 and 2011.
According to a court declaration filed on May 8, Wright said seven trustees were named, including Craig Wright, David Kleiman, and Ms. Uyen Nguyen — whom Wright claimed he has had no contact with since 2016. Wright has also said in the past, “Access to the encrypted file that contains the public addresses and their associated private keys to the Bitcoin that I mined, requires myself and combination of trustees reference in Tulip Trust I to unlock based on Shamir scheme.”
In the declaration, Wright also pointed to the existence of bitcoin mined under his direction at by staff at HighSecured and Signia Enterprises. Wright said this stockpile is also inaccessible.
The existence of a previously unknown second Tulip Trust – to which Equater Consultants is named a trustee – also come to light in the court document.
It is unknown how the Federal court has ascertained the existence of bitcoin holdings not previously disclosed by Wright. A transcript of a hearing held on June 11 before Judge Reinhart is under seal, along with the bitcoin listings Wright has provided.
Stephen Palley, a lawyer who has followed the case closely but does not represent either party, said, “This is a huge pressure point in settlement negotiations which may or may not be happening.”
Negotiations between the parties reached an impasse at a mediation session held on June 18.
Neither Freedman or Palley responded to a request for comment. As it stands Wright will appear for a deposition on June 28, at the U.S. District Court for the Southern District of Florida.
Bloomberg: Craig Wright Does Not Have Access To Bitcoin Fortune
Craig Wright said that he cannot comply with a court order to provide a list of all his early bitcoin (BTC) addresses, Bloomberg reported on June 28
The Australian computer scientist and self-proclaimed Satoshi Nakamoto said that he may not be able to access the coins at all.
As previously reported, the United States District Court of the Southern District of Florida issued an order on May 3 requiring Wright to produce a list of his public bitcoin addresses. Wright, however, failed to disclose his bitcoin holdings per court order.
The order was part of an ongoing case against Wright that was filed by the estate of David Kleiman. Kleiman was a cyber-security expert, whom many believe to have been one of the first developers behind bitcoin and blockchain technology.
Kleiman’s estate brought the case to court in February 2018, claiming that Wright stole hundreds of thousands of BTC worth over $5 billion after Kleiman’s death, claiming that Wright “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”
Wright claims that he gave a key piece of information regarding the funds and wallets to Kleiman before his death, making it difficult to find the digital wallets or the funds they purportedly hold.
Wright maintains that he was the mysterious creator of bitcoin, going so far as to file U.S. copyright registrations for the bitcoin white paper.
Wright stated that he decided to stop working on bitcoin in 2010, adding that “I brought in Dave because he was a friend and he knew who I was and he was a forensic expert and I wanted to wipe everything I had to do with bitcoin from the public record.”
Craig Wright Uses Falsified Docs To Prove Innocence In Kleiman Case
Self-proclaimed Bitcoin (BTC) creator Craig Wright has allegedly provided fabricated court documents to prove a trust deed with his plaintiffs, as seen from documents revealed by trial lawyer Stephen Palley on Twitter on July 3.
According to Palley, the self-styled Satoshi Nakamoto has failed to prove his case by presenting court documents that Palley alleges to be fake, as they contain multiple chronological discrepancies.
Among the exhibits filed with the District Court for the Florida Southern District on July 3, there is a document submitted as proof of cooperation between Wright and the now-deceased David Kleiman, whose lawyers filed the case against Wright in February 2018. Kleiman’s lawyers accuse Wright of stealing hundreds of thousands of Bitcoin — at press time valued at over $5 billion — after Kleiman’s death in April 2013.
While the presented deed of trust document is ostensibly dated Oct. 23, 2012, the metadata of the file indicates that the document was actually created after the death of Kleiman, as Palley found. The trust document apparently uses a 2015 copyright notice related to Calibri, the Microsoft Word font, indicating that the document could not be from earlier.
Alleged falsification of trust deed documents by Craig Wright. Source: Stephen Palley
Following the apparent accusation of Wright for forging the court documents, Palley wrote:
“I mean it makes sense that the inventor of bitcoin can time travel.Your honor.”
In late June, Wright declared that he cannot comply with a court order to provide a list of all his early bitcoin addresses, claiming that he gave a key piece of information regarding the funds and wallets to Kleiman before his death.
Craig Wright’s Wife Could Testify Under Oath in Ongoing Kleiman Trial (#GotBitcoin?)
Craig Wright’s wife, Ramona Watts, has been called to appear for an examination as part of the latest developments in the ongoing Kleiman v. Wright trial.
In a letter addressed to the British Queen’s High Court, dated July 22, Judge Bruce Reinhart requested Watts testify under oath as part of an international judicial assistance. The request is made on behalf of the plaintiff, as Watts’ appearance may be relevant to court proceedings and useful to the plaintiff’s case.
Plaintiff Ira Kleiman is suing Watts’ husband for civil theft, fraud, unjust enrichment, and breach of partnership duties of loyalty and care relating to a purported multi-billion dollar cache of bitcoin. Kleiman, who represents his late brother Dave Kleiman’s estate, alleges the Australian technologist unlawfully took possession of the bitcoin collectively mined by his brother and Wright.
Though the total amount of bitcoin is unknown, Kleiman believes the estate is due at least 300,000 bitcoins, and their respective forked assets.
Reinhart alleges in the document Watts, as wife and business associate to Wright, is knowledgeable to the facts of the case. She will be called to testify on non-privileged statements made by Wright regarding Kleiman, the creation of bitcoin, his mining activity, and the Tulip Trust at the “heart” of the case.
Of note is W&K Info Defense Research, a firm incorporated in 2011 by Dave Kleiman, and the firm’s former director, Uyen Nguyen. Watts will provide testimony regarding Wright’s statements that he was not involved in the firm and has lost touch with Nguyen.
The plaintiff’s council allege Wright forged documents and emails that purport Kleiman elected Nguyen to director “in an effort to facilitate [Wright’s] theft of W&K’s property,” a year after Kleiman’s death.
Also called to testify are novelist Andrew O’Hagan, who was contracted to write the The Satoshi Affair, which purports to be a biography of Satoshi Nakamoto, and Robert MacGregor, who has purchased Nakamoto’s life rights.
O’Hagan is said to have had close access to Wright for six months, and is compelled to submit his notes, “many hours of tape” interviews and drafts relating to the book.
The witnesses will appear in Boies Schiller Flexner, Ira’s council’s, office in London at an agreed upon date.
Craig Wright: Kleiman Estate Will Now Dump $2 Billion in Bitcoin (#GotBitcoin?)
Bitcoin (BTC) prices could face fresh volatility after Craig Wright was ordered to pay 500,000 BTC to the brother of Dave Kleiman, his late business partner.
The payout — worth more than $5 billion at the time of writing — could attract an estate tax rate of 40%, which Kleiman’s estate would have to pay.
There are now fears that 200,000 coins could be dumped on the market in order to settle $2 billion bill, potentially causing a crash.
In an interview with fintech magazine Modern Consensus, Wright said he would comply with the court order, which follows allegations that he stole hundreds of thousands of BTC from Dave Kleiman.
Based on thin Ayre?
The ruling brings to a head a debacle which has dragged on for years and involved an increasing number of third parties far removed from Wright and his entourage.
In the face of multiple claims of fraud on social media, Wright even began suing those who disagreed with his alleged proof that he created Bitcoin.
Those lawsuits came to nothing, while this week, those publicly supporting Wright’s original statements evaporated.
Only Calvin Ayre, a major supporter of Wright’s favored altcoin Bitcoin SV (BSV), continued to argue he was Nakamoto.
“The judge ruled Craig and Dave are Satoshi. This is not accurate but its enough to have Craig accurately be referred to as Satoshi as he is saying and this will likely be appealed,” he wrote on Twitter.
Large numbers of responses then immediately dismissed the comments. United Kingdom-based entrepreneur Alistair Milne described Ayre’s words as flat-out lies.
“The US court *did NOT* rule that Wright/Kleiman were Satoshi Nakamoto. Anyone telling you otherwise is either insane or a liar,” he tweeted.
In what will be a source of personal satisfaction to Wright’s previous legal victims, meanwhile, one person present at the hearing concluded it was now not libellous to label him a fraud.
Citing testimony from Kleiman, Katie Ananina wrote in a digest of the proceedings:
“I now know the way to say #craigwrightisafraud and don’t get in trouble. It’s been said in a Federal Court.”
Ananina noted the judge also threw out Wright’s claim he would be able to prove he had access to the private keys bolstering his Nakamoto claim by January 2020.
Read the follow-up to this story here.
Calvin Ayre Falsely Claims Court Ruled Craig Wright Invented Bitcoin
Bitcoin SV (BSV) proponent Calvin Ayre has come under fire once again after erroneously claiming that a court ruled Craig Wright created Bitcoin (BTC).
Ayre: Judge Just Ruled Wright Created Bitcoin
In a tweet on Aug. 28, Ayre said the judge presiding over Wright’s recent court case decided he was Bitcoin’s creator, Satoshi Nakamoto.
“Its nice timing to be out at the same time as Craig gets the Satoshi coins out of tulip trust. Also good timing with Judge just ruling Craig is Satoshi,” the tweet stated.
Wright was in court over alleged theft of $10 billion worth of BTC. The case concluded this week, with Wright now obliged to pay the plaintiff, the estate of former business partner Dave Kleiman, half of the fortune.
Both Wright and Ayre tout BSV as the true version of Bitcoin, and have tirelessly promoted the cryptocurrency, which has faced multiple technical and publicity difficulties in its 10-month history.
No Basis In Official Judgment
Following Wright’s downfall, Ayre remained an increasingly lone voice supporting him, but his latest claims were met by immediate pushback.
Twitter users referenced the text of the court judgment, which emphatically denies making a ruling over whether Wright is or is not Nakamoto. The text reads:
“First, the Court is not required to decide, and does not decide, whether Defendant Dr. Craig Wright is Satoshi Nakamoto, the inventor of the Bitcoin cybercurrency. ”
It is thus unclear how Ayre arrived at his claim, which he made while advertising an upcoming book about Wright’s recent difficulties.
As Cointelegraph reported, questions now focus on how markets will cope with a $2 billion tax bill for Wright’s penalty.
Separate speculation focuses on Wright’s ability to pay at all, and if he has access to the private keys to the 500,000 BTC stash. The court has accepted Wright’s claim that he had access to the coins, with the document noting:
“The Court also is not required to decide, and does not decide, how much bitcoin, if any, Dr. Wright controls today. […] the Court accepts Dr. Wright’s representation that he controlled (directly or indirectly) some bitcoin on December 31, 2013, and that he continues to control some today.”
Kleiman Files — Craig Wright Controversy Gets Complicated
With each passing day, Craig S. Wright’s reputation continues to take a bigger beating. This time around, a Florida court has found the self-proclaimed inventor of Bitcoin (BTC) to be guilty of not only submitting false documents as part of an earlier testimony but also lying about a legal dispute (related to the estate of his former partner, David Kleiman) to the United States justice system.
The presiding judge, Bruce Reinhart, concluded the latest hearing by ordering Wright to surrender more than $4 billion worth of cryptocurrency in favor of Kleiman’s estate. The assets in question comprise of a whopping 500K BTC as well as half of all the intellectual property that has ever been created by Wright. Moreover, Wright has been ordered by Judge Reinhart to turn over documents in which it is claimed that he had unlawfully seized digital assets from Kleiman.
It now remains to be seen whether Wright is able to comply with the order and actually deliver the BTC to Kleiman’s estate. There is a doubt that arises here because Wright has stated in his latest testimony that he is not aware of where the crypto in question is being stored, nor is he absolutely sure if he even has access to any of these external digital storage entities.
Satoshi identity still a mystery?
Wright has been claiming for a long time that he is, in fact, Satoshi Nakamoto — the pseudonymous author of Bitcoin’s source code and its white paper, a document that lays out the core design for the currency’s digital ecosystem.
In recent times, when called a fraud, Wright has resorted to suing all those who disagree with the notion that he is the mastermind behind Bitcoin. And even though all of his lawsuits have amounted to almost nothing in the end, the people who have publicly showcased their support for Wright over the years seem to be disappearing rapidly.
In addition to this, a number of established crypto experts and enthusiasts seem to be of the opinion that Wright’s recent submission of false documents to the Florida court could be the final straw as far as his “I am Satoshi” claims go. Cointelegraph reached out to Craig Russo, a crypto investor and owner of Peer — a Boston-based startup behind the popular media outlet SludgeFeed, to get a better understanding of the matter. Russo believes that Wright needs to provide more tangible evidence in order to support his outlandish claims, saying:
“The false documents definitely do not help his credibility. I think the mystery of who exactly made up “Satoshi” will continue to unravel into the future.”
Similarly, Christopher Inks, the founder and CEO of TexasWest Capital — a crypto research trading firm — also believes that, while there is a slim possibility that Wright might be Satoshi, he is making his claims harder to believe — especially with all of the recent stories that have emerged in relation to him. Inks added in a statement to Cointelegraph:
“There is no doubt that he is a polarizing individual and that may simply be the result of his intelligence. Many highly intelligent people have difficulty interacting in a positive way with everyone else. But should people believe him just because he says so?”
Will The Drama Hurt The Market?
Wright is of the belief that in the wake of the aforementioned court ruling, the crypto market could soon be flooded with billions of dollars worth of Bitcoin. However, as mentioned earlier, it appears as though Wright might not have access to the private keys associated with the various digital wallets containing the BTC.
In this regard, it is worth recalling that in an earlier testimony, Wright had said that he had passed on a key piece of information to Kleiman before his demise back in 2013. As a result of his death, Wright thinks it will be extremely hard for him (or anyone else for that matter) to track down the storage entities holding the crypto. With that being said, the self-proclaimed inventor of Bitcoin did concede the following in a recent email to his spokesperson, Ed Pownall:
“The courts ruled that Ira (Kleiman, brother of Dave Kleiman) inherited those billions. Now he has to pay estate tax on that if he wants it.”
As a result of these recent developments, the market at large is now replete with FUD related to an impending market crash that might happen because of BTC being liquidated or moved around.
Cointelegraph has reached out to CryptoYoda, an independent crypto analyst and trader, with over 200K followers on Twitter. In regard to the matter, he stated that he is highly doubtful that Wright really has access to the legacy coins, so all of the lingering concerns regarding a potential sell-off can be set aside for the time being.
However, he did add that the situation will need to be immediately reevaluated if Wright or any other third-party enters the private key associated with the legacy wallet. This, in CryptoYoda’s opinion, will most likely not be the case anytime in the near future. He added:
“As long as no coins are being moved, there is no reason to speculate about a potential selloff imho. Should coins from the legacy wallet move eventually, then we at least have proper grounds for discussion.”
However, since Judge Reinhart passed his verdict a few days back, Bitcoin’s price has witnessed some serious negative action (particularly on Aug. 29).
Over the course of the past 24 hours, the price of a single BTC has slid from $10,251 to briefly dipping under $9,400 — with the market sentiment at large appearing to be bearish. Providing his insights on the issue, Russo pointed out:
“I think anytime that a whale investor needs to unload Bitcoin in the open market, for whatever reason, it adds a downward pressure on price. However, I think the risk is relatively low that Wright actually has access to those coins but savvy investors should definitely monitor the situation.”
Additionally, Cointelegraph also got in touch with Daniel Kelman — a New York-based lawyer, creditor of Mt. Gox. In his opinion, only Bitcoin SV (BSV) — a digital currency that has Wright as its most vociferous proponent — will be affected by these recent developments, with traders most likely dumping the asset in the near future.
“I don’t see a reason for it to affect the rest of the market, possibly sell orders of BSV into other cryptos push other prices higher. Wright doesn’t have a stack of BTC to sell off, which the market now knows for sure.”
Looking Ahead… What Happens Now?
While there seems to be a lot of drama surrounding the Kleiman-Wright case right now, it appears as though a lot of this talk is confined primarily to the realm of social media. In this regard, the upcoming events (such as the launch of Bakkt’s Bitcoin futures products as well as other institutional investment offerings) are more likely to have a bigger impact on the cryptosphere.
In fact, Russo sees the market continuing its consolidation period for the foreseeable future, despite many people calling for Bitcoin to fill the CME futures gap at around $8,500. According to Russo, “My guess is that the number either gets front-ran or we fall rapidly through it to find support below.”
On the subject of Wright’s future obligations and what happens to him next (from a legal standpoint), Kelman stated unequivocally that there absolutely exists a possibility of the Australian national going to jail for his actions. In his opinion, even though Judge Reinhart did not find Wright’s conduct being at the level of criminal contempt, he ended his order by stating:
“Dr. Wright intentionally submitted fraudulent documents to the Court, obstructed a judicial proceeding, and gave perjurious testimony.”
In layman’s terms, Reinhart basically called Wright a fraud. It now remains to be seen whether he refers the matter to the U.S. attorney’s office, which would see a new case being initiated against the maligned computer scientist. Expounding his thoughts on the matter, Kelman added:
“Reinhart may now refer the matter to the US Attorney’s office and a case can be brought against Wright from there. Federal judges choose their words carefully. Using words like ‘perjurious testimony’ and ‘intentionally submitting fraudulent documents’ indicates how serious this is, those are felonies. I’d be surprised if this isn’t followed up on by prosecutors.“
It now remains to be seen how retail trader fears of a rumored $2 billion crypto dump (i.e., because of a potential 40% tax on the 500K BTC in question) could play out. On top of that, it will also be interesting to see how Kleiman’s estate seeks to limit their incoming tax hit if indeed it gets hold of the Bitcoins. In this regard, one option could be that the tax be paid out in installments — which would be extremely advantageous for the estate from an economic standpoint — especially if Bitcoin’s value were to continue surging over the next few years.
Craig Wright’s Hidden Treasures: Court Order To Unlock The Tulip Trust
Since early 2018, Craig Wright, a controversial Australian computer scientist and tech entrepreneur, has been the defendant in a lawsuit filed on behalf of the estate of Dave Kleiman, Wright’s late business partner. The claim alleged that following Kleiman’s death in 2013, Wright unlawfully appropriated more than a million Bitcoin (BTC) that the duo had mined jointly in the early years of the cryptocurrency, as well as some related intellectual property. After a recent resolution, the case seems to be decided — although many important questions remain unanswered.
Missing Keys And Bonded Couriers
In late August, after months of litigation, Magistrate Judge Bruce E. Reinhart of the Southern District of Florida ruled in favor of the Kleiman estate, which is represented by Dave’s brother Ira.
In his decision, Reinhart reproached Wright, saying that “Dr. Wright’s demeanor did not impress me as someone who was telling the truth,” and also admonished the defendant for engaging in a “willful and bad faith pattern of obstructive behavior, including submitting incomplete or deceptive pleadings, filing a false declaration, knowingly producing a fraudulent trust document, and giving perjurious testimony at the evidentiary hearing.”
The judge didn’t buy Wright’s version of the story. The Australian claimed that the partnership between Dave Kleiman and himself, acting under the alias Satoshi Nakamoto, was the entity responsible for inventing Bitcoin. Having realized at some point that digital currency had come to be used predominantly for funding illicit activity, Wright decided to distance himself from the project.
Wright maintains that he and Kleiman put some 1 million BTC they’d mined together into what they called the “Tulip Trust,” a storage unit secured by the two men’s cryptographic signatures.
Although Wright lost access to the funds when Kleiman died, the self-proclaimed Satoshi Nakamoto says that the missing keys needed to unlock the trust will be somehow delivered to him by a bonded courier. The distrustful judge responded with a literary allusion: “Apparently, dead men tell no tales, but they (perhaps) send bonded couriers.”
Wright and his counsels pledged to challenge the order, although they had to request a two-week extension of the time afforded to file the motion. At the same time, Wright argued that, should Ira end up with half of the Tulip Trust, he will need to sell a huge chunk of it in order to be able to pay a 40% estate tax, which would inevitably tank the Bitcoin market.
The markets, however, didn’t seem particularly intimidated, as no major price movements occurred in the days following Wright’s statement. Ryan Selkis, CEO of crypto research firm Messari, told Bloomberg he was not concerned about Wright transferring BTC to Ira Kleiman because he didn’t think Wright had any to transfer. RT host Max Keiser even predicted that the realization of Wright lacking the money he is ordered to pay would drive BTC price steeply upward.
On Sept. 17, both sides filed a joint motion to extend all discovery and case deadlines by 30 more days to facilitate “good faith settlement discussions” in which they have stated to be engaged. The parties claim in the document that they are currently finalizing “all relevant terms,” and that pushing back all the deadlines — including the trial — would help them reach a final, binding settlement agreement.
Some crypto and tech publications were quick to report that the court ordered Wright to pay over $5 billion worth of Bitcoin to Keliman’s estate, which is, in fact, not exactly what Reinhart had ruled. Indeed, Reinhart’s order establishes that all Bitcoin mined by the Kleiman-Wright partnership between 2009 and 2013 — as well as whatever Bitcoin-related intellectual property the duo had produced throughout the same period — belongs to Wright and Kleiman’s heirs in equal parts.
However, the judge never produced a definitive determination on how much Bitcoin is to be divvied up or what specific intellectual property the ruling applies to. This does not come across as surprising, given that the court has been unable to establish these details to date.
There are two reasons why the “$5 billion” language has gained so much traction in the cryptosphere. One is that the original claim filed with the U.S. District Court mentioned “hundreds of thousands of bitcoin,” the ownership of which was contested. When the claim was filed in 2018, the valuation of Kleiman’s half of the alleged Tulip Trust exceeded $5 billion, which remains its value today. What helped to further engrave the figure in the crypto community’s collective mind is Wright’s interview to Modern Consensus.
In a conversation with an overly sympathetic interviewer, Wright stated: “The judge ordered me to send just under 500,000 BTC over to Ira. Let’s see what it does to the market. I wouldn’t have tanked the market. I’m nice.” He mentioned the figure “5 billion” several times, even complaining how the newfound knowledge of their family’s enormous wealth would ruin his children’s lives.
Granted, it is extremely unlikely that any litigation of this kind would passingly establish the true identity of Satoshi Nakamoto. The judge in the present case explicitly stated: “First, the Court is not required to decide, and does not decide, whether Defendant Dr. Craig Wright is Satoshi Nakamoto, the inventor of the Bitcoin cybercurrency.” Yet, Wright seems to be leveraging the case to promote his “I am Satoshi” narrative.
It is a widespread belief that the massive pool of Bitcoin that was mined in 2009 and 2010 and has since remained dormant belongs to the founding father of cryptocurrency. The amount of digital currency stored in the Tulip Trust (1.1 million BTC) coupled with Wright’s description of the timeline of its emergence loosely correspond with the semi-mythical story of the original whale stash. According to crypto researcher Sergio Lerner, some 980,000 of the first Bitcoins to be mined can be traced back to a single mining entity, and they have never been moved.
The court’s success in linking Wright’s identity to the original trove of more than a million digital coins would effectively validate him as the inventor of Bitcoin. It would also mean that Wright has to pay some $5 billion to Ira Kleiman — who, in turn, would have to flood the market with a significant share of the Bitcoin obtained in order to pay a 40% estate tax.
Wright’s alleged, temporary lack of access to the so-called “Satoshi funds” is his excuse for why he still hasn‘t shown the world this solid evidence to support his claims and why he has yet been unable to comply with the court order. It is shaky ground indeed, and Wright can’t stay there forever.
What Comes Next
It looks like the case has been effectively decided on its merits: Wright will owe Dave Kleiman’s estate half of what they jointly produced. Even though Wright’s side has pledged to appeal the latest ruling, it seems all but impossible that any judge would ever overturn it without shocking new evidence. As blockchain lawyer Stephen Palley shared with the Financial Times: “I view this case as being over. When you have two federal judges that have said you’re a ducking [sic] liar, you’re not going to win,” although he added that the case may still linger for six months to a year.
Many intriguing side developments, however, are likely to emerge in the coming months. A lot hinges on how much of Wright’s Bitcoin (if any at all) officials will be able to discover. At this point, since the defendant failed to produce any BTC addresses (save for a few unverified ones that were produced under a protective order), the court does not possess much information on his assets.
As the civil process ensues, there will likely be more discovery requests — and even if Wright’s counsels manage to buy some time appealing the decision, the funds locked up in the Tulip Trust should finally become available in early 2020, according to Wright himself.
Once the Bitcoin jointly mined by Wright and Kleiman is located, the Australian will have to give up half of it to his late business partner’s estate. If he refuses to honor the court order, Wright may face some tangible consequences, as Layla Tabatabaie, senior consultant at the blockchain PR firm Wachsman, stated to Cointelegraph:
“Wright would be found in contempt of court, and the court may impose imprisonment or monetary fines in fiat currency against him. Being held in civil contempt of court could actually be worse than being held in criminal contempt, because you aren’t afforded the same constitutional rights as a criminal defendant. Barring any egregious actions by Wright, it is far more likely that the punishment would begin with mounting monetary fines.”
In other words, failing to produce the Bitcoin addresses in which his and Kleiman’s funds are stored will, at some point, become costly for Wright.
Another consequential detail that makes this case interesting to follow and could render it a landmark case for the crypto industry is how exactly the court will go about calculating the amount of money to be paid to the plaintiff and whether repayment will be in coin or fiat.
One way to look for directions on what could happen is to examine the comparable cases that involve digital securities. The Securities
and Exchange Commission has, on several occasions, ordered rescission to wronged crypto investors as part of a securities settlement. However, according to Dror Futter, a partner at law firm Rimon P.C., the regulator has not addressed this question.
So, as there is no guidance as to how such payouts are to be executed — whether in fiat or crypto, and if in crypto, at what exchange rate — the next few months should bring more certainty to the many undefined variables in this equation.
Craig Wright Says He Has No Funds For Settlement In Kleiman Case
The latest court documents in the David Kleinman versus Craig Wright case filed on Nov. 1 reveal that Wright — the self-proclaimed Bitcoin (BTC) creator Satoshi Nakamoto — informed the plaintiff that he could not finance a 500,000 BTC ($4.5 billion) settlement.
Given that the case was apparently reaching a resolution with the agreement, the plaintiff stopped active litigation and focused on settlement, joining Wright’s requests to extend the deadline into late October. Then Wright allegedly broke the settlement agreement:
“On October 30, without any advance notice, Plaintiffs were informed Craig could no longer finance the settlement and was ‘breaking’ the non-binding settlement agreement.”
The given document is the plaintiff’s expedited motion to depose out of state witness. The deposition explains that in September the plaintiffs discussed a settlement with Wright, noting that his claims implied he had the means to cover the costs.
A Crucial Deposition
Therefore, because Wright broke the settlement agreement, the plaintiffs resumed preparing for a trial.
As part of the process, they contacted the chief financial officer of Wright’s companies in 2013 and 2012, James Wilson, “during which Dave was alive and Craig alleges he sold Dave interest in his companies in exchange for a fortune of Bitcoin.”
On Oct. 31, Wilson told the council that he will be in the United States, in Washington D.C., and available for testimony on Nov. 8. The defense counsel, on the other hand, informed that they were not intentioned to consent to the deposition at the aforementioned date. The plaintiff of the document explains:
“Under the Local Rules of this District, parties must have 7-days notice for a deposition in Florida, but 14-days notice for an out of state deposition.”
For this reason, the plaintiff requested that the defendant and Wilson are given permission to attend the meeting via video conference and that the deposition is completed in under 14 days — earlier than required by local rules depending on court approval.
Therefore, the Plaintiffs “respectfully request that the Court allow them to depose Mr. Wilson on November 8, 2019 in Washington D.C. on condition they provide Defense counsel with the ability to attend the deposition via video link,” the document reads.
As Cointelegraph reported in mid-October, Wright has asserted that Satoshi Nakamoto, the author of the Bitcoin white paper, plagiarized him.
According to a court document filed in the Southern District of Florida Oct. 30, Wright pulled out of the settlement agreement in which he would forfeit half his intellectual property and bitcoin mined prior to 2014. With the settlement broken, trial motions are now back on.
The document was filed by Kleiman’s counsel to set a date to depose an out-of-state witness.
Ira Kleiman brought the charges against Wright in 2018 on behalf of his deceased brother’s estate. Kleiman alleges Wright manipulated business documents, emails and other correspondence to defraud the estate.
Wright was sanctioned in late August, after being found in contempt of court by Magistrate Judge Bruce E. Reinhart for failing to disclose a complete list of his bitcoin addresses, reportedly amounting to 1.1 million bitcoin.
During the hearing, Wright claimed his bitcoin was inaccessible due to his former business partner David Kleiman’s death as well as a complicated encryption scheme. The arguments were found to be inconsistent and in bad faith.
“These discussions began at Craig’s request and due to the fact that Craig represented he had the means to finance a settlement,” Velvel Freedman, member of the prosecution and partner at Roche Freedman, said in the filing.
Wright allegedly reneged on the non-binding agreement “without notice.”
Earlier, just days after the sanction was levied, Wright requested additional time to challenge the judge’s court order due to the approach of Hurricane Dorian.
Kleiman is represented by Kyle Roche and Velvel Freedman of Roche Freedman LLP, while Wright is represented by Rivero Mestre LLP.
The trial date is set for March 30, 2020.
Tether Supports Peter McCormack’s Defense Against Craig Wright.
Leading stablecoin operator Tether has announced it will support crypto podcaster Peter McCormack in a lawsuit against self-proclaimed Bitcoin (BTC) creator Craig Wright.
General counsel for Tether and cryptocurrency exchange Bitfinex, Stuart Hoegner, revealed on Nov. 8 that Tether also rejects Wright’s claims of being Satoshi Nakamoto. He explained:
“Wright has had myriad opportunities to prove that he is Satoshi and has not definitively done so.”
As Cointelegraph reported in April, Bitcoin SV (BSV) proponent Craig Wright filed a libel claim against McCormack over him accusing Wright of fraud and falsely claiming to be Satoshi Nakamoto, the creator of Bitcoin. The move by Wright’s legal team also resulted in Binance delisting BSV in April alongside other exchanges including Kraken and Shapeshift.
Tether joins the “long game” against Wright
Hoegner says that Tether “stands behind” McCormack in his defense against Wright. Hoegner suggests that the support provided goes beyond just words, though the lawyer did not clarify exactly what kind of support McCormack will receive:
“Litigation can be drawn-out and expensive, but we are committed to the long game. We admire Peter’s conviction and are humbled to support his defense against what we see as frivolous and vexatious litigation.”
Wright is also involved in other legal disputes albeit as defendant in another legal case filed by former business partner David Kleinman. As Cointelegraph reported, court documents filed on Nov. 1 revealed that Wright could not finance a 500,000 BTC ($4.4 billion) settlement in the case.
Craig Wright Reveals Document Claiming Origin of Satoshi Nakamoto Name
Self-proclaimed Bitcoin (BTC) creator Craig Wright, showed what he claims is a document that explains the origins of the Satoshi Nakamoto pseudonym.
In an interview published by industry news outlet Modern Consensus on Dec. 19, Wright has shown to his interviewer a document representing an article from digital database of an academic journals JSTOR, dated Jan. 5, 2008.
The article is about a person named Tominaga Nakamoto, who lived between 1715 and 1746 in Japan. The document also contained the following handwritten notes:
“Nakamoto is the Japanese Adam Smith. Honest Ledger + Micro Cash. Satoshi is Intelligent History. Not too hard.”
Nakamoto: The Japanese Adam Smith
According to Wright, he has chosen the name Nakamoto in honor of Tominaga Nakamoto. The handwritten note compares him to Adam Smith, who is by many regarded as the father of modern economics. When asked whether Nakamoto’s economic ideas were the reason why he has chosen his name, he answered:
“In part, yes. He wrote about money and honest money and the rational nature of things. The shogun [feudal ruler] at the time was in financial crisis, and economic austerity. […] I like the description of him, and I got into his brother, Tōka. ‘Nakamoto was upright and quiet but impatient in character’ and I thought: ‘That sounds like me.’”
When it comes to the first word of the pseudonym, Satoshi, Wright says it means “intelligent learning.” This, he explained, refers to one having access to the knowledge conquered by his ancestors.
While Wright claims to be Satoshi Nakamoto, in November he also informed the plaintiff that he could not finance a 500,000 BTC ($3.7 billion) settlement in the case that the Kleiman estate initiated against him. Dave Kleiman was a cyber-security expert, whom many believe to have been one of the first developers behind the Bitcoin and blockchain technology who died in April 2013.
Kleiman’s estate, led by David’s brother Ira Kleinman initiated the case in February last year, accusing Wright of stealing hundreds of thousands of Bitcoins — worth over $5 billion — after the developer’s death.
Satoshi Nakamoto is known to have mined the origin blocks on the Bitcoin blockchain, the so-called Satoshi blocks and consequently should own a significant number of coins on his/her address.
Crypto Experts To Testify At Craig Wright’s $8 Billion Bitcoin Lawsuit
Bitcoin evangelist Andreas Antonopoulos and novelist Andrew O’Hagan are to be deposed in the court case.
Two well-known crypto personalities are about to testify in the court case against self-proclaimed Bitcoin creator Craig Wright (and one million BTC he allegedly holds).
Andreas Antonopoulos, crypto evangelist and author of Mastering Bitcoin, is expected to testify today while novelist Andrew O’Hagan, author of “The Satoshi Affair,” is scheduled for January 15—sandwiched between two days of Wright’s own testimony.
Wright is being sued by the estate of Dave Kleiman, a computer forensics expert who was involved in the early days of Bitcoin. The lawsuit alleges that Wright and Kleiman partnered up to form a Bitcoin mining company called W&K Info Defense Research LLC in 2011—which ended with Wright “defrauding” Kleiman of 1.1 million bitcoin, worth more than $10 billion when the suit was filed in February 2018. The stash is currently worth $8.7 billion.
In the past, O’Hagan had spent some time with Wright when writing his book, which is dedicated to researching the identity of Bitcoin’s mysterious creator Satoshi Nakamoto and whether Wright has any real claim to this title.
In 2016, at the time of publishing, the work was widely criticized by the crypto community, with O’Hagan’s alleged superficial understanding of the blockchain technology cited as one of its main shortcomings.
Antonopoulos is listed as an expert on the plaintiff’s (brother and heirs of late David Kleiman, one of the alleged Bitcoin creators) side, so he will be arguing against Wright.
US Judge Rules That Craig Wright Won’t Forfeit Bitcoin In Kleiman Case
A United States District Judge has ruled that a previous sanction ordering Craig Wright to give up half of his Bitcoins to the estate of Dave Kleiman will not stand.
U.S. Magistrate Judge Bruce Reinhart’s delivered the sanction ruling last August in the long-standing court battle over an alleged 1.1 million Bitcoins which were mined by Wright and Kleiman in partnership in the early days of Bitcoin, shortly after Wright claims he invented it.
According to court documents filed with a U.S. district court in Florida on Jan. 10, Judge Beth Bloom ruled that Reinhart’s earlier sanction order was not proper.
Spurious claims earned Wright a hefty fine
As Cointelegraph reported, in August 2019, Reinhart ruled that Wright had perjured himself by presenting falsified documents, and recommended that he hand over 50% of the over 1 million Bitcoin he allegedly mined with Kleiman.
However, the latest ruling states that this sanction was not proper, as the deemed facts (that Wright had an equal partnership with Kleiman) do not specifically relate to the discovery issue (a list of Wright’s Bitcoin holdings).
Moreover, even if the court did accept the deemed facts, this discovery abuse would remain “uncured,” as the court still does not know how much Bitcoin Wright owns.
Judge Bloom did conclude, however, that Wright had not made a good faith effort to comply with discovery orders and should still pay the Kleiman estate’s attorney fees.
The Kleiman estate filed a motion requesting legal costs of $658,000 in November last year. This led Wright to immediately respond with a counter-motion, asking for this to be thrown out as both the hours worked and hourly rate were “unreasonable.”
‘Mysterious’ Courier To Shine A Light On Bitcoin Holdings
Wright is not off the hook regarding the Bitcoin yet though. The judge ordered that Wright has until Feb. 3, 2019, to inform the court if a “mysterious bonded courier” arrives with the final key slice so that he can access his Bitcoin holdings.
The judge questioned the plausibility of Wright’s previous assertion that this courier would deliver the slice by January 2020. However, she did say that the court should indulge him the opportunity.
Bitcoin SV Prices Soar After Craig Wright Claims Access To A Bitcoin Fortune
Craig Wright, the polarizing figure who may or may not be Satoshi Nakamoto, is today telling the court that he has received the keys to access an $8.9 billion crypto fortune called the Tulip Trust.
Some background on what that means: Wright was a business partner to one David Kleiman, and they mined a lot of Bitcoin together back when that was an easier thing to do. The pair ended up with 1.1 million Bitcoin in their custody, and that stash is known as the “Tulip Trust” in reference to the tulip bubble that took the Netherlands by storm in the 17th century.
Kleiman passed away in 2013, and the law is clear that half of the business’ assets should go to Kleiman’s estate. But this never happened, so Kleiman’s surviving brother is suing Wright for the estate’s share.
A Complicated And Contentious Court Case
A 2015 investigation pointed to Wright and Kleiman as the possible inventors of Bitcoin, and reporters surfaced a draft of a contract that described the existence of the trust and effectively grants all of it to Wright. This moved David Kleiman’s brother Ira to launch the suit in February 2018.
It was a long and drawn out process for the legal system to identify where Wright was storing his crypto assets, and Wright was ultimately found in contempt of court last year for failing to supply a list of any BTC holdings he acquired before December 31, 2013. Wright then received a court order on January 10, 2020 calling for him to effectively open the kimono on the Tulip Trust.
He was granted until February 3, 2020 to provide the keys to the Tulip Trust on the rationale that the keys needed to be delivered by a bonded courier sometime in January.
It Appears The Keys Have Arrived
Wright has now filed paperwork demonstrating his compliance with the court order:
Dr. Wright notifies the Court that a third party has provided the necessary information and key slice to unlock the encrypted file, and Dr. Wright has produced a list of his bitcoin holdings, as ordered by the Magistrate Judge, to plaintiffs today.
This is a bombshell among bombshells if it’s actually true. It could easily help Wright continue his “I’m Satoshi” schtick and win him some converts.
But if it’s less than totally true, it would only be the latest weird, reality-bending twist in Wright’s already surreal and controversial story.
In any case, that’s what Wright told courts today: he now has access to billions in crypto.
Bitcoin SV Soars On The News
Bitcoin Satoshi Vision, a Wright-led fork of Bitcoin Cash that purports to more closely adhere to the anonymous Bitcoin creator’s true ideas about cryptocurrency, surged today. The currency opened the day’s trading at $193.99 and rose as high as $447.13 before settling around $388.
With the day’s gains approaching 100%, this has some calling Wright’s tactics a straight-up exit scam.
Lawyer Admits Craig Wright Has No Private Keys
Controversial altcoin Bitcoin SV (BSV) has crashed 17% overnight after its main proponent failed to prove he has access to $9 billion in Bitcoin (BTC).
Data from Coin360 and Cointelegraph Markets confirmed a difficult 24 hours for BSV holders, who saw huge gains over the past week as Craig Wright’s court case delivered fresh revelations.
Wright Evidence “Did Not Include” BTC keys
After Wright had promised to prove he was the controller of funds linked to Bitcoin creator Satoshi Nakamoto, BSV — the hard fork of BTC he claims is the “real” Bitcoin — shot up to all-time highs of $436.
In the event, Wright disappointed. After what he described as a “bonded courier” delivered evidence in the multimillion-dollar legal battle to confirm his identity, Wright’s lawyer subsequently confirmed it contained no private key information at all.
“The file that he’s received did not include private keys,” Andres Rivero told cryptocurrency news outlet Decrypt on Jan. 18.
Even before the information went public, BSV began descending from its highs to hit press-time levels of $262 — 40% below its Jan. 15 peak.
Bitcoin Cash Reclaims Market Cap
While BTC has sustained higher levels in recent days and weeks, BSV’s fortunes now appear inextricably tied to developments with Wright.
As Cointelegraph reported, the events triggered derision among online commentators, with memes involving fake BTC transactions circulating on social media.
BSV has now lost the position of fourth-largest cryptocurrency by market cap, which it briefly took from fellow hard fork, Bitcoin Cash (BCH). By contrast, over the past 24 hours, BCH/USD gained 7%.
In the top twenty, only Dash (DASH) matched BSV for losses, shedding 15% after likewise experiencing sudden gains in January.
Interview: Craig Wright Still ‘99.9999%’ Sure That He’ll Get Access To BTC Fortune
Speaking with Cointelegraph’s video team on Jan. 20, Satoshi-claimant Craig Wright remained confident that he will get access to the Bitcoin fortune he famously claims to be locked up in the Tulip Trust.
Access to the Tulip Trust
Regarding the controversial Tulip Trust, and his ultimate ability to access his reported bitcoin fortune, Wright told Cointelegraph:
“I’m 99.9999 and a few more 9s percent certain that I will be taking control of my BTC and whatever else.”
Craig Wright is one of the more famous of the many people to claim to be Satoshi Nakamoto, the pseudonymous author (or authors) of Bitcoin’s 2008 whitepaper. Since February 2018, Wright has been locked in a court battle with the estate of David Kleiman, his deceased former partner. The case hinges on a fortune of a million Bitcoin — worth roughly $8 billion at press time.
The Missing Keys
Whether or not Wright can even access this fortune is a major sticking point of this case. This was most recently evident in major price fluctuations for Wright-promoted Bitcoin SV, which dropped by 18% on Jan. 18 upon news that documents Wright filed with the court contained keys, but only public keys. The private keys, he maintains, are still in the hands of the trust.
Wright said that he formed the trust “back when Bitcoin was not worth anything at all” as a prescient move to secure his prospective assets. When asked why he himself is not one of the trustees, he said:
“Because I’m smart enough not to be. Because then people could force me to actually move coins. You can take things from trustees. If it was mine, people could have seized assets from me.”
Current Bitcoin SV Activity
The convoluted script of the Kleiman v. Wright case has been followed by extreme turbulence in Bitcoin SV price. Wright was dismissive on the subject of the present market, calling it “basically a regurgitation of every stupid thing that’s happened.”
Craig Wright Court Saga Nears Judgment Day With More Questions Than Answers
It has been over a year since Australian computer scientist Craig Wright proclaimed himself as the inventor of Bitcoin (BTC), and the estate of his late business partner, Dave Kleiman, became clinched in litigation over the fruits of the duo’s collaboration in the inaugural years of the cryptocurrency era. The stakes include billions worth of Bitcoin as well as ownership of blockchain-related intellectual property.
Mainly because of what the magistrate judge overseeing the case called Wright’s “willful and bad faith pattern of obstructive behavior,” the pretrial process devolved into a messy barrage of mutual admonitions and complaints where even the most basic facts of the case — such as the amount and location of disputed funds — could not be clearly established.
The parties seemed on track to complete discovery by the court’s cutoff date of Jan. 21, and the trial was scheduled for March 30. But as the deadline crept closer, Wright’s legal team stepped up its game to stun the opposition with a series of massive blows that shook up the crypto markets and left team Kleiman scrambling to push back the trial date. Here’s what to make of last week’s erratic news.
Multiplication of Tulip Trusts
One of the case’s main puzzles revolves around the mysterious Tulip Trust — a stash of over 1 million BTC that Wright and Kleiman had supposedly mined jointly between 2009 and 2013. Up until late December 2019, facing court orders to disclose essential information about the trust, Wright maintained that he did not have a key for the list of the addresses that held deposited funds in an encrypted file.
The missing piece that would provide Wright with full access to the registry was supposed to arrive in January 2020 with a “bonded courier.” In a recent interview with Cointelegraph, Wright stated that he is 99.9999% sure that he will be in possession of the crypto soon.
On Dec. 31, without prior notice or attendant explanation, Wright began turning in hundreds of previously undisclosed documents for discovery, some of which related to the structure of the Tulip Trust. On Jan. 6, Kleiman’s lawyers received a third Tulip Trust document that ostensibly pointed to the existence of three separate trusts.
They motioned to seal it, basing their argument on certain parts of the document that contains confidential information. However, the judge later ordered that non-disclosure agreements should not stand in the way of discovery in the process.
Whether the Tulip Trust or trusts really exist, and whether Wright can exercise control over the enormous digital wealth purportedly stored in them, he has come to be seen as the ultimate test for his claim of being Satoshi Nakomoto.
On Jan. 10, as Cointelegraph reported, United States District Judge Beth Bloom issued a 23-page order questioning if “it is remotely plausible that the mysterious ‘bonded courier’ is going to arrive, yet alone that he will arrive in January 2020.” Yet, the judge agreed to wait until Feb. 3 — the first day after the end of January when the court will be open — for Wright to comply and unlock the trust. Essentially, this has become a hard deadline for him to prove that he has anything to do with the invention of Bitcoin.
A Mysterious Third Party
While proclaiming in his blog his staunch belief in law, Wright also noted that it is essential to test its bounds as society develops. Perhaps, he sees the U.S. District Court for the Southern District of Florida as a venue to challenge the law for the greater good.
District Judge Bloom’s order enumerates multiple ways, in which the defendant “delayed and obstructed the discovery process” of the case, and notes how he “refused to give and interpret words in their very basic meanings, was combative, and became defensive when confronted with previous inconsistencies.” Combined with the opinion of Bruce Reinhart, another legal official in the case, this makes two federal judges essentially calling Wright a liar.
Indeed, it doesn’t take a law school degree to see how Wright has been exploiting the case to gain publicity and perpetuate his “I am Satoshi” narrative while maintaining enough ambiguity to keep it marginally plausible.
On Jan. 14, Wright’s team made perhaps its strongest move when they filed a short notice of compliance with the court order. All it said was that a “third party has provided the necessary information and key slice to unlock the encrypted file, and Dr. Wright has produced a list of his Bitcoin holdings.” The document provided no clarity on whether the “third party” is the long-awaited bonded courier.
Kleiman’s side received a list of 16,404 Bitcoin addresses. They immediately requested a continuation of the discovery cutoff, to reschedule the deposition of key witnesses and to extend the trial. They also asked the court to provide them with seven interrogatories — sets of written questions, to which the defendant will have to respond within a set time frame — regarding the affiliation of the alleged “bonded courier” and information that they had delivered.
Along with throwing some 20,000 new documents at plaintiffs shortly before the discovery deadline, Wright protested their motion by arguing that the requested “extensions of time and requests for additional unilateral discovery are additional unwarranted sanctions and are sought solely for the purpose of delay.”
The court, however, granted the extensions and honored the interrogatory requests. The new discovery cutoff was set to April 17, and the trial will be held in July 2020. Wright has won himself some breathing room for another few months.
Outside The Courtroom
If Wright’s strategy of cultivating ambiguity was successful in keeping several dozen qualified attorneys baffled for several months, the already confused crypto community was poised to become a boon for the big news. The scoop of him producing the Tulip Trust details exploded like a bombshell in this electrified space.
There is no way Wright did not foresee the markets reading the economical note of the unnamed third party as the announcement that the “bonded courier” had arrived. Most likely, that was the plan all along. Ample room for misinterpretation was already there.
“The necessary information and key slice to unlock the encrypted file” that the third party provided sounded a lot like Wright getting access to the Bitcoin stored in the coveted trust. What it really said was that he could now unlock the file with the list of public addresses allegedly linked to the stash.
Public addresses are the same as public keys — they need to be matched with private keys to provide access to the stored assets. Nowhere in the court documents did Wright nor his lawyers mention acquiring private keys to gain control of the coins — yet some immediate media reports were exact to this effect.
Coincidence or not, around the same time, a fake Whale Alerts tweet started making rounds, alleging that 1 million BTC departed Wright’s wallet heading toward an exchange. It soon emerged that the said transaction only involved 1,500 BTC, and the entity behind it was crypto exchange Bitfinex refilling its hot wallet.
The exuberance, however, took a real toll on the markets. Fueled by the news, the price of Bitcoin SV (BSV), Wright’s brainchild cryptocurrency allegedly reflecting the “true vision” behind the original Bitcoin, doubled within a day. Most of the gains, however, were quickly wiped out when a couple of days later, Wright’s attorney, Andres Rivero, confirmed to industry publication Decrypt that the information they had received did not include private keys.
In fact, Wright had announced the same thing a few days earlier when he admitted to CCN that Kleiman’s estate lawyers would find nothing in his latest submission to the court. To those who paid attention, the confession barely sounded like a punchline statement from a man who had just proved all his critics wrong.
In any case, it shouldn’t take much longer for the truth to come out if Wright is a crook or a genius performer who deliberately keeps crying wolf time and time again — only to come out as the real wolf when no one believes him anymore.
Volatility, Illiquidity Threaten BSV’s Newfound Position
Volatility in bitcoin SV (BSV) is raising concerns about the resilience and stability of the world’s fifth-largest cryptocurrency by market capitalization, as ranked by CoinMarketCap.
On Jan. 14, at around 00:35 UTC, the price of BSV shot up 6 percent over a 10-minute period and 22 hours later, it was up a total of 139 percent from $196 to $458.
A sell-off quickly followed BSV’s rally at around 00:30 UTC on Jan. 15, with the price dropping from $458 to $278. According to some analysts, the cryptocurrency is plagued by controversy and poor liquidity due to shallow order book depth.
Research analyst at eToro, Simon Peters, said that when rumors surfaced that BSV founder Craig Wright received the “keys” to 1.1 million bitcoins (BTC) locked up in a fund known as the Tulip Trust, many in the crypto community anticipated Wright could dump a large proportion of his BTC holdings onto the market in favor of BSV.
The trust is said to be guarding pieces of the private keys necessary to unlock the bitcoin Wright and his former partner Dave Kleiman mined before 2014. Wright claims this is the $9.5 billion fortune of Satoshi Nakamoto, bitcoin’s founder.
“As it stands, a 300 percent move in a week is generally unsustainable,” Peters said of BSV.
Titled “Bitcoin Satoshi’s Vision,” BSV has been embroiled in controversy since its early days, with major exchanges including Binance, Kraken and Shapeshift delisting the cryptocurrency , a move that has been contributing to increased volatility, Peters said.
“BSV is more vulnerable to major price swings due to a lack of depth of the order books in the smaller exchanges where it can be traded,” Peters said.
An order book refers to an electronic list of buy and sell orders for a specific security or financial instrument organized by price level. When there aren’t enough buyers or sellers on the books, illiquidity makes the assets more at risk to be manipulated by larger funds and investors.
BSV’s trading volume remains relatively thin compared to the others in the top 10 cryptocurrencies for the past 30 days. However, the standard deviation of returns — in other words, its volatility — has soared relative to the other nine leading cryptos. That signals that single orders in its shallow order books have a large impact on BSV’s price.
“Clearly the case,” said Alex Krüger, a prominent crypto trader and analyst, discussing BSV’s swift price rise and steep sell-off, saying that it was related to a lack of liquidity on the major exchanges.
But it’s not just the result of delisting the coin on many major exchanges. As Peters suggested, Wright’s recent court issues may have also caused a demonstrable effect on price movement.
CoinDesk recently reached out to Wright for comment but he declined to comment on price movement, BSV’s delisting and price volatility.
Craig Wright Accused of Confusing Trial Proceedings
The counsel for the estate of Dave Kleiman has accused self-proclaimed “Satoshi Nakamoto” Craig Wright of abusing attorney client privilege to withhold documents and confuse trial proceedings.
On Feb. 2, plaintiff Ira Kleiman — the late Dave Kleiman’s brother and personal representative of the estate — filed a memorandum challenging Craig’s privilege designations with the United States Southern District Court of Florida.
The memorandum is the latest turn in an ongoing litigation saga over Wright’s alleged misappropriation of over a million Bitcoin (BTC) that he and Kleiman ostensibly jointly mined in the early years of the cryptocurrency between 2009 and 2013.
Sword And Shield
“To say that discovery in this case has been challenging would be a dramatic understatement,” the memorandum begins, claiming that:
“An adversary [Wright] who submits false declarations, offers contradictory perjurious testimony under oath, and submits false documents that even his own counsel are forced to disavow, severely hinders the ability to seek the truth.”
The latest in this alleged “pattern of obfuscation,” the memorandum argues, is Wright’s set of “sweeping assertions of attorney-client, work-product and joint defense privileges” to ostensibly jeopardize trial proceedings.
The memorandum notes that Wright has asserted privilege over 11,000 documents, with a further 2,100 purportedly added just in the week before the filing.
Most pernicious, the plaintiff claims, is the apparent web of companies Wright is attempting to use in order to shield these documents — expected to end up numbering in the “tens of thousands” — all the while disavowing that he has any control over them:
“Defendant cannot use these entities as both a sword (assertion of privileges) and a shield (claiming to not be able to access company documents).”
Moreover, the plaintiff argues, almost all of the companies invoked by Wright to assert privileges no longer exist.
Given that the law is explicit in establishing that a company’s privilege “dies with it,” Wright should now be ordered to immediately produce all the documents associated with the dissolved entities, the memorandum states.
Beyond challenging Wright’s privilege assertions and professed lack of control or access, the counsel accuses him of lacking any explanation for having begun to cite joint defense privilege as grounds to withhold documents. The memorandum further claims Wright is unduly withholding selected communications on the grounds of attorney-client privilege.
Wright Has Been Accused Of Bad Faith
In late August, Judge Bruce E. Reinhart ruled in favor of the Kleiman estate, reproaching Wright at the time for engaging in a “willful and bad faith pattern of obstructive behavior.” This behavior included “filing a false declaration, knowingly producing a fraudulent trust document, and giving perjurious testimony.”
In mid-January, the court granted the Kleiman’s estate request for an extension of 90 days, after Wright’s counsel produced its 20,000+ documents shortly before the discovery deadline.
These are the documents which ostenbily pertain to the trust in which the misappropriated Bitcoin is custodied, known as the Tulip Trust.
“I’m smart enough not to be [a Trustee],” Wright quipped, in an interview with Cointelegraph last month, “because then people could actually force me to move coins […] lots of greedy people in the past have tried to take money from me.”
William Shatner Doubts Craig Wright’s Claims To Inventing Bitcoin
Captain Kirk seems unconvinced that the Australian computer scientist Craig Wright is the inventor of Bitcoin (BTC).
William Shatner, the Canadian actor that played Captain Kirk in the original Star Trek series, suggested that Wright is not behind the pseudonym Satoshi Nakamoto — the seminal cryptocurrency’s creator. In a tweet on Feb. 11, Shatner said:
“Ask yourself why would someone claim to be Satoshi and offer zero proof? Either put up or shut up, right?”
The discussion started after a Twitter user answered Shatner’s announcement of having been at a cryptocurrency event by expressing the hope that “fake Satoshi wasn’t there.”
After clarifying that this was a reference to Craig Wright, another twitter user claimed that Wright is indeed Satoshi and that Bitcoin SV (BSV) is the real Bitcoin, to which Shatner answered:
“Why can’t he prove it? From what I’ve read is that some mysterious bonded courier would deliver the keys (which honestly is a scene right out of Back to the Future.) If he is, he should be able to prove it. This is like the modern day search for Anastasia.”
In his tweet, Shatner was referring to the Tulip Trust which purportedly contains the private keys to a million Bitcoin — worth $9.7 billion as of press time — that Wright claims will be handed to him by a courier. In late January, Wright told Cointelegraph that he is confident that he will gain access to the funds in question.
Billions in Bitcoin at stake
Wright has been wrapped up in legal proceedings brought against him by the estate of David Kleiman, an American computer scientist. The two sides are litigating over Wright’s alleged misappropriation of over a million Bitcoin that he and David mined together from 2009 to 2013.
Wright claims to be Satoshi Nakamoto, but in November he told the plaintiff that he could not afford a 500,000 BTC (nearly $4.9 billion) settlement in the case that the Kleiman estate initiated against him. Earlier this month, he was accused of abusing attorney client privilege to withhold documents and confuse trial proceedings.
Craig Wright Threatens BTC And BCH With Potential Lawsuits
Craig Wright, who claims to be the Bitcoin creator known as Satoshi Nakamoto, has warned the Bitcoin (BTC) and BCH to stop using the Bitcoin database in order to avoid potential lawsuits. He claims that both networks may also violate the laws under the terms of Bitcoin’s original EULA and MIT License.
The man behind Bitcoin SV in the recent personal blog post added that he is going to take back control of the system he created, and is ready to fight for his rights this year.
Craig Wrights’ Main Argument
Wrights argues that the distributed Bitcoin database rights are governed by the Copyright, Designs and Patents Act 1988 (CDPA) and the Copyright and Rights in Databases Regulations 1997 (Databases Regulations 1997). So it should be considered as personal property.
Dr. Wright claims that representation of 21 million total Bitcoin which each divisible by 100 million Bitcoin is only a verbal deal.
The Bitcoin’s creator should have the full rights to claim this unilateral contract with those nodes to issue, adding that:
“As the creator of Bitcoin, I maintain the sui generis rights to any copy of the database created from Genesis in January 2009. I shall not be relinquishing the ownership. I will be licensing it, and have already engaged in a process.”
Ever since 2018 Craig Wright has been the defendant in a lawsuit filed on behalf of the estate of Dave Kleiman, Wright’s late business partner. The claim alleged that following Kleiman’s death in 2013, Wright unlawfully appropriated more than a million Bitcoin (BTC) that the duo had mined jointly in the early years of the cryptocurrency, as well as some related intellectual property.
The new trial with Kleiman’s case has been postponed to April 17, and the trial won’t be held till July 2020. But in any case, it shouldn’t take long to find all these claims are legitimate or not.
Courts Will Seize BTC With Miners’ Help: Self-Proclaimed Satoshi Craig Wright
Self-proclaimed Bitcoin (BTC) creator Craig Wright claims that Bitcoin can and will be seized to accommodate court orders.
On Feb. 26, Bitcoin influencer Peter McCormack published screenshots showing Wright claiming that the first seizure of Bitcoin by courts will happen this year and won’t require private keys.
Bitcoin Seizure Through Miner Coordination
Instead, it will supposedly happen through miner and node coordinating to comply with a court order. He concluded:
“Without keys, BTC will be confiscated. Code is law, and courts can mandate patching code. Bitcoin is not encrypted. It is economic.”
In the second and last screenshot, Wright asks for a list of firms that lost Bitcoin, such as hacked exchanges. He claimed that he wants to “ensure that people get their money back starting this year.” He said:
“You see, Bitcoin is easily confiscated, easily returned to the owner.”
Wright’s Critics Speak Against Him
William Shatner, the pop culture star and actor that played Captain Kirk in the original Star Trek series, recently expressed the idea that Wright is not the creator of Bitcoin. He said:
“Ask yourself why would someone claim to be Satoshi and offer zero proof? Either put up or shut up, right?”
Shortly afterward, Changpeng Zhao, the co-founder and CEO of major cryptocurrency exchange Binance said that Wright “is a fraud.” When later explaining the reason why he said it, he told Cointelegraph:
“He claims to be the founder of Bitcoin, Satoshi Nakamoto, which is a lie. He hurts the credibility of Bitcoin and is a disgrace to our entire industry.”
Can Bitcoin Be Seized As Self-Proclaimed BTC Creator Craig Wright Claims?
As Cointelegraph reported yesterday, self-proclaimed Bitcoin (BTC) creator Craig Wright claims that Bitcoin can and will be seized to accommodate court orders. What follows is an analysis of whether what he says is possible and plausible.
Screenshots resurfaced on Feb. 26, show that Wright claims Bitcoin will be seized without using the owner’s private keys. Instead, it will be moved through miners and nodes coordinating to comply with a court order. He said that code is law but “courts can mandate patching code.”
Cryptocurrency security consultant Sergio Demian Lerner told Cointelegraph that Wright’s proposition “is morally and legally ridiculous” given that the stolen Bitcoins “may have switched hands too many times to confiscated now.”
Mining Pool Coercion Could Work, In Theory
Furthermore, Lerner also said that miners cannot take control of the Bitcoins without changing the consensus protocol. Still, he admitted that mining pools, on the other hand, may be able to block Bitcoins if forced. He explained that governments could attempt to force most mining pools to prevent some Bitcoins from changing hands with a process similar to a 51% attack, but he does not expect this approach to work:
“The largest pools are composed by many smaller independent mining farms, and those farms would just start mining solo to prevent coercion instead of being part of such a pool. Therefore I suspect the government-controlled mining pool will just vanish from the available active and useful hashrate.”
Lerner concluded that such an approach would need law enforcement to prosecute miners that mine on pools that do not enforce censorship in many different jurisdictions. Even if such measures would be taken by governments, he expects that “Bitcoin would just switch to some other form of proof-of-work and keep moving forward.”
Author of the first proof-of-work crypto Karma System Emin Gün Sirer suggested that the claim is part of Wright’s effort to “lay down a misguided foundation to make his followers believe that miners can unilaterally reassign coins.” He said:
“This is likely part of his strategy to take ownership of Satoshi’s coins. It’s very transparent, shallow, and unconvincing. My professional opinion is that he’s a nobody trying to pull a simple scam on unsophisticated investors captivated by his unconvincing, poorly constructed, fraud-ridden tale.”
Wright Is Drowned In Criticism
While Wright has always been a controversial figure in the cryptocurrency space, lately he attracted much more criticism than usual.
Just this month, co-founder and CEO of major cryptocurrency exchange Binance Changpeng Zhao defined Wright as “a fraud” and the Canadian actor that played Captain Kirk William Shatner said that he does not believe his claims. More recently, Zhao also told Cointelegraph:
“He claims to be the founder of Bitcoin, Satoshi Nakamoto, which is a lie. He hurts the credibility of Bitcoin and is a disgrace to our entire industry.”
Still undeterred, Wright decided this month to warn Bitcoin and Bitcoin cash that they should stop using the Bitcoin database in order to avoid potential lawsuits.
Judge Rules Craig Wright Must Only Pay 20% of Kleiman’s Attorney Fees
United States Magistrate Judge Bruce Reinhart has ruled that the self-proclaimed Satoshi Nakamoto, Craig Wright, must pay only 20% of the legal fees requested by the estate of the late-Dave Kleiman.
According to March 16 court documents, the attorneys representing Dave’s brother Ira requested a total of $592,558 for legal fees for hourly rates of between $610 and $1,050, and roughly $66,000 in other expenses.
Kleiman Estate Requested Nearly $660,000 In Fees And Expenses
Court documents show that Judge Reinhart found the quoted rates to be excessive, stating, “I am personally familiar with the hourly rates charged by the top civil litigators in Palm Beach County. Those rates range between $600 and $700 per hour.”
The case relates to Ira Kleiman’s allegations that Wright sought to fraudulently gain access to an enormous sum of Bitcoin (BTC) held by his brother, with the court ruling that “Satoshi Nakamoto” comprised a partnership between Wright and Kleiman during the proceedings.
Wright To Pay Nearly $166,000 In Attorney And Expense Fees To Kleiman
Reinhart also rejected claims for work carried out by Kleiman’s lawyers that did not relate directly to pertinent motions or hearings, was poorly specified, or took an unreasonable amount of time to complete.
The judge also noted difficulties in assessing the fees associated with a blockchain forensics expert contracted by Kleiman “because no information was provided regarding his hourly rate or how he spent his time,” determining that “$40,000.00 constitutes a reasonable expense.”
In total, Wright must pay $113,760 in attorney fees and an expense award of $52,040.
Attorney Fees Granted For Efforts To Compel Compliance From Wright
Reinhart recently granted sanctions for “continued non-compliance” in failing to produce sufficient documentation evidencing his Bitcoin holdings.
As such, the judge awarded attorney costs to Kleiman for work completed toward efforts to compel Wright’s compliance. However, the lawyers were only granted rates of between 50% and 64% of that which was requested.
Kleiman Estate Seeks Two-Week Extension Amid COVID-19 Lockdown
In the latest disruption to the case between the self-proclaimed Satoshi Nakamoto, Craig Wright, and the estate of the late Dave Kleiman, the plaintiffs are seeking a two-week extension to discovery amid the coronavirus pandemic.
In a motion filed on March 24, Dave Kleiman’s estate asserts that the COVID-19 lockdown has presented “numerous complications associated with meeting deadlines set prior to the onset of the global pandemic.”
The COVID-19 Pandemic Makes Depositions Improbable
With the plaintiffs’ representation currently working from home due to the law firms temporarily closing their offices, the Kleiman estate is requesting a two-week extension to complete three fact witness depositions. They stated:
“Offices are closed, support staff are not onsite, experts and lawyers are unable to travel, in-person meetings are not possible, and the ability to review documents in a collaborative manner has been trying, to say the least.”
In light of the disruptions, the plaintiffs request that the hearing date for the parties to disclose expert witness summaries be postponed from March 27 until April 10, and that the deadline for fact discovery be pushed forward from April 17 to May 1.
Plaintiffs Accuse Jimmy Nguyen Of Evading Subpoena
The estate also notes that they have been trying to serve a deposition subpoena to nChain chief executive, Jimmy Nguyen, since Feb. 14, including five attempts at his home during February alone.
The motion, which accuses Nguyen of either intentionally evading service, traveling outside of the country, or both, says that:
“Mr. Nguyen’s Twitter feed indicates that, over the past few months, he has spent a significant amount of time traveling outside of the country with Dr. Wright. He would therefore be aware of the discovery cutoff, and know that Plaintiffs are running out of time to serve him.”
Judge Slams Wright For Forged Documents
The case between Wright and Kleiman’s estate has been anything but smooth, with Wright coming under fire on multiple occasions for producing forged documents and giving perjured testimony throughout the case.
Last week, U.S. Magistrate, Judge Reinhart, ruled that Wright must pay almost $166,000 in attorney and expense fees to the Kleiman estate.
Craig Wright Challenges Court Order Criticizing His Evidence In $4B Kleiman Case (#GotBitcoin?)
Craig Wright has objected to a court order dismissing his attorney-client privilege in an ongoing legal battle over a fortune in bitcoin (BTC).
On March 23, Wright filed his objection with the U.S. District Court of Southern Florida in an ongoing case brought by Ira Kleiman, brother of the late David Kleiman who was a former business partner of Craig Wright.
Wright said the order “erroneously disregarded the attorney-client relationship” between the defendant (Wright) and his attorney, based on “preconceived conclusions of the defendant’s character.”
The case hinges upon whether Wright can prove his ownership of 1.1 million bitcoin (worth around $7.5 billion) held in the so called “Tulip Trust” – a massive encrypted trove allegedly mined with Kleiman. The Kleiman estate is suing Wright for half the bitcoin as well as intellectual property.
After a mysterious “bonded courier” failed to arrive with the keys early in 2020, Wright told the court he is unable to prove his access to the trust due to attorney-client privilege.
Earlier this month, presiding District Magistrate Bruce Reinhart dismissed Wright’s argument and apparently questioned the lawyer’s existence.
According to a March 9 filing, Wright had presented a declaration stating: “I am lawyer [sic] and obtained my bachelor of law degree in 2007 from Moi University in Kenya.” Reinhart said he also introduced “a printout of a LinkedIn profile that reflects Mr. Mayaka having a Bachelor of Laws degree from Moi University,” and asserted that Mayaka is counsel to the trust.
“I decline to rely on this kind of document, which could easily have been generated by anyone with word processing software and a pen,” Reinhart said.
The judge found last summer that Wright had argued in bad faith, committed perjury and admitted false evidence during the case.
According to Wright, the latest order “improperly relied on prior conclusions about [the] defendant that were unrelated to the existence of an attorney-client relationship and, in so doing, ignored the fundamental and bedrock principle of our legal system.”
Wright has notoriously said he is the inventor of bitcoin, Satoshi Nakamoto, but has yet to provide conclusive evidence to support the claim.
Craig Wright’s Lawyers Slam Court Order Based On ‘Personal Attacks’
Lawyers for Satoshi claimant Craig Wright have strongly criticised a magistrate’s order as wrong in law and “based in significant part on personal attacks” against Wright and his Kenyan attorney.
Wright‘s team was objecting to the Order on Discovery filed in the U.S. District Court in the Southern District of Florida, that required him to produce a cache of 11,000 documents in a multi-billion lawsuit issued by the estate of his late business partner Dave Kleiman. They said the “order is clearly erroneous and contrary to law. It should be reversed and vacated”.
Earlier in the case, Magistrate Judge Bruce E Reinhart dismissed Wright’s attempts to claim attorney client privilege over the documents using a variety of different legal arguments. Reinhart said he “gave no weight” to Wright’s sworn statements, and that he had been known to produce fake documents.
‘I Am Lawyer’ Says Note From Kenyan Man
Wright had submitted a sworn, un-notarised declaration from a Kenyan man named Denis Bosire Mayaka who he claimed was his attorney.
The note said: “I am lawyer [sic] and obtained my bachelor of law degree in 2007 from Moi University in Kenya.” Reinhart said it “could easily have been generated by anyone with word processing software and a pen.”
In his ‘Objection of Magistrate Order on Discovery’ Wright’s attorneys said doubts over their client’s credibility and prior determinations about forgery should not have been a factor when considering Mr Mayaka’s credibility.
“Plaintiffs interject that “the credibility of a witness is always relevant.” But that is a non-sequitur. The “witness” in the declaration—and whose credibility is at “issue”—is Mr. Mayaka, not defendant. And in any event, prior determinations of forgery on unrelated issues is not an issue of credibility unless, of course, one were making a propensity argument.”
Wright’s legal team also accused the plaintiffs — the Kleiman Estate — of offering no evidence to support their claims he intentionally hid documents and did not comply with discovery. Attacking the plaintiffs directly, the lawyers asserted “they drone on for pages about other subjects, such as Tulip trusts and bonded couriers.”
Tinker, Tailor, Courier, Lawyer
The ongoing lawsuit was brought by Ira Kleiman, deceased brother of Wright’s former business partner David Kleiman, to claim his brother’s share of the Tulip Trust. At the time of press, 1,100,111 BTC from the trust would be worth approximately $8 billion.
One of the central arguments to Wright’s claims is that a third party had access to private keys for 1.1 million Bitcoin (BTC) in the Tulip Trust who could deliver them to Wright as ordered to do so by the court.
However, when pressed by the court to produce documents from the courier related to a previously unidentified “Tulip Trust”, Wright claimed they were protected by his attorney-client relationship with Mayaka, spousal privilege and privilege relating to his involvement with 17 companies.
Wright’s Attorneys Said Of The Order Rejecting All Of That:
“It runs afoul U.S. law and the rules of evidence in rejecting the Mayaka Declaration. It concludes without any evidentiary support that the corporations were defendant’s alter ego, thereby finding that he used the corporations for fraudulent or illegal purposes. It claims that there is no evidence of defendant’s connection to the corporations but ignores the fact that the Magistrate didn’t let defendant introduce that evidence.
It fails to acknowledge that the documents are privileged under Florida law. It misconstrues Australia law to avoid the Judicial Comity Doctrine. It concludes without any basis that the foreign corporations waived their attorney-client privilege.
It ignores the extensive case record in finding that defendant waived his objection that the documents were not in his possession, custody, or control. And it made no effort to determine whether the privileged communications were even relevant to this lawsuit before ordering their wholesale production.”
Craig Wright Accused of Plagiarizing Law Degree Dissertation
The man who claims to have written the Bitcoin (BTC) whitepaper may not have written his own law degree dissertation.
That’s the picture painted by “PaintedFrog,” the pseudonymous writer of a Medium post on April 9. This post demonstrates large-scale similarities between Wright’s dissertation and several other publicly available sources.
Wright’s dissertation for his LLM in International Commercial Law for Northumbria University was written in 2008, titled The Impact of Internet Intermediary Liability.
Yet the following screenshot suggests much of Wright’s paper was lifted wholesale from Hillary E. Pearson’s 1996 paper, Liability of Internet Service Providers.
Other Sections Of Pearson’s Paper Were Less Obviously Copied. However, As Craig Wright Himself Wrote In 2011:
“Plagiarism varies in its extent. It goes from simply rephrasing the ideas of another without referencing your sources right through to the literal block copy of paragraphs of text and the theft of entire passages.”
The image below shows numerous examples of Wright paraphrasing Pearson’s work, all without referencing her paper as a source.
As noted in the expository Medium article, the vast majority of Pearson’s paper was either copied verbatim or paraphrased by Wright – all without attribution:
“Pearson’s Liability of Internet Service Providers contains 58 paragraphs. Wright appropriated 45 of them; 25 in full and 20 in large part. This plagiarism is extensive and methodical, and cannot be explained away as an oversight in neglecting to cite the author.”
And Another One
Wright’s paper cites The Promise of Internet Intermediary Liability by Ronald Mann and Seth Belzley (2005) as one of its sources. However, wholesale portions of the paper’s footnotes can be found in Wright’s 2011 paper, copied verbatim.
The post goes on to document similarities between Wright’s work and that of another academic paper written in 2001, as well as a Wikipedia page.
The Medium post claims that Wright’s paper also plagiarized, to a lesser extent, numerous other original public works, including Court: Yahoo! Must Bar French From Nazi Sites (2006) by Crispian Balmer; Sale of product through an intermediary can create personal jurisdiction for patent infringement (2005) by Dennis Crouch, and many more.
Most ironic of all is the assertion that Wright plagiarized his very own public denunciation of plagiarists. Wright’s 2011 posts on InfosecIsland.com, in which he excoriates internet plagiarists, was apparently also reused from the alleged plagiarism of Pearson’s 1996 paper.
Cryptocurrency enthusiasts have long disputed the notion that Craig Wright is really the anonymous Bitcoin creator, Satoshi Nakamoto. These latest findings are unlikely to change that any time soon.
Cointelegraph reached out to Craig Wright for comment. This article will be updated if any reply proves forthcoming.
Craig Wright Abandons Libel Suit Against Adam Back, Pays All Legal Fees
Crag Wright, the self-proclaimed Satoshi Nakamoto and chief scientist at NChain, has dropped a libel lawsuit against Adam Back over the Blockstream chief executive’s assertion that Wright was fraudulent in claiming to be the creator of Bitcoin (BTC).
Wright filed the complaint alongside similar suits targeting Ethereum cofounder Vitalik Buterin, Bitcoin.com founder Roger Ver, podcaster Peter McCormack, and Twitter user ‘Hodlnaut’ one year ago.
Craig Wright Drops Libel Suit Against Blockstream CEO
On April 12, Adam Back tweeted that Craig Wright had abandoned his libel suit. Back stated that Wright’s representation “declined to give any explanation of why Craig retracted.”
The Blockstream CEO also notes that Wright agreed to reimburse all legal fees he incurred — describing the move as strange given that it is “reasonable costs” of between 65% and 75% is the legal standard. In total, he estimates that the exercise cost Wright upwards of $25,000.
After agreeing to dismiss the case, Back states that he received roughly $8,400 “by wire the very next business day.” Back adds:
“On the plus side I have to thank Craig for paying for a very informative 2hr+ briefing on latest UK libel law trends, and hilarious and detailed briefing on the case vs @PeterMcCormack from legal experts at RPC. (Who were barely stifling smirks at the craziness much of the time.”
In response to the ruling, McCormack tweeted: “Me next.”
Wright Pays Back’s Legal Costs In Full
In July 2019, the High Court of England and Wales dismissed the libel suit against Roger Ver over lack of jurisdiction. Ver was served with the $125,000 lawsuit in May 2019, to which he quickly responded with a video message stating: “Craig Wright is a liar and a fraud, so sue me, again.”
In January 2020, the U.K. High Court also ruled that it did not have jurisdiction over the suit against Hodlonaut, asserting that the case must proceed in Norway instead.
Vitalik Buterin did not respond to the letter sent by Wright in April 2019, and no update appears to have taken place regarding the case since.
Bitcoin SV’s Jimmy Nguyen: ‘Google Me’ If You Want to Serve Your Subpoena
Bitcoin SV’s Jimmy Nguyen has denied claims he is “intentionally evading” a subpoena in the Craig Wright case and said he’s easily located via Twitter or Google.
Bitcoin SV’s Jimmy Nguyen has denied claims he is “intentionally evading” a subpoena in the long-running court case brought by the Kleiman estate against Satoshi-claimant Craig Wright.
Nguyen’s legal team has submitted an opposition to the Kleiman estate’s motion that he comply with a subpoena to produce documents and testify in the case, which involves a dispute over ownership of the 1.1 million Bitcoin Dave Kleiman allegedly mined with Wright.
The plaintiffs had argued “Mr Nguyen may be intentionally evading service” based on the “sheer number of unsuccessful service attempts.”
But Nguyen’s submission said he wasn’t difficult to track down, and that Kleiman’s lawyers could have simply Googled him at any point to serve him at one of his many well publicized speaking engagements at crypto conferences around the world. It pointed out that the plaintiff’s had even submitted his Twitter posts to the court.
“Plaintiffs follow Mr. Nguyen’s social media, yet fail to explain their failure to serve Mr. Nguyen at any of his public appearances in 2019 or 2020”
We Did Serve Him, Sort Of
The Kleiman Estate filed a motion on April 6 to compel compliance with two subpoenas, one to produce documents and the other for deposition testimony.
They argued they had served Nguyen via email on March 10, and via Twitter on March 29. But Nguyen’s team said the email had been sent to his defunct nChain address, and both the email and Twitter messages had merely asked if he was willing to accept a subpoena that way:
“Both the email and Twitter requests were only that — requests. This is similar to asking a party to accept mailed service of a summons; the party has no obligation to agree, and the mere asking of the question is not itself effective service”
It Was Even Live Streamed
On other dates they attempted to serve him at his home in February, he was in Moscow for the Future of Sports & Blockchain Conference, and then in London for the CoinGeek conference, which he said they could have watched live on YouTube:
“Plaintiffs did not effect service on Mr. Nguyen because he was traveling outside the country on each attempted service date in February and March. Plaintiffs needed only to have performed Google searches to discover Mr. Nguyen’s publicly-promoted appearances. Had they done so, they (a) would have realized that Mr. Nguyen was not at home and (b) could have served him in person at one of his conferences.They did neither.”
Kleiman’s lawyers also claim to have served Nguyen the subpoena by certified mail on April 1, but Nguyen submitted evidence the delivery had been unsuccessful because there was “no authorized recipient” available to accept it.
So if he’s not at home, where is he now? Nguyen’s lawyers said that since late March “he has been isolating in safe and remote locations due to the COVID-19 global pandemic.”
Does Nguyen Know Anything?
Given Nguyen didn’t become involved with Wright until years after Kleiman passed away in 2013, he’s not an obvious candidate as a witness in the case. In December 2017, Nguyen became CEO of nChain — where Wright works as Chief Scientist, before assuming the role of President of the Bitcoin Association (which promotes BSV) one year later.
Nguyen’s submission points out that although he was listed as a potential witness as far back as May 2018, the Kleiman team didn’t seek to subpoena Nguyen before the 1st, 2nd, 3rd, or 4th revised discovery deadlines that have passed since the case began February 2018. It wasn’t until a month after the fifth revised discovery deadline that the plaintiffs began attempting to serve him:
“Plaintiffs’ complete lack of urgency in seeking discovery from Mr. Nguyen over the past two years undermines any claim that Mr. Nguyen’s testimony documents are critical to the Florida Lawsuit.”
Craig Wright’s Satoshi Case Goes To Trial July 6
Craig Wright’s Satoshi case will finally go to trial, both sides confirmed to Cointelegraph.
Lawyers representing both sides confirmed to Cointelegraph that they expect the trial to convene on July 6.
The case that has been captivating the crypto community for several years now may finally receive a resolution. On May 1, Judge Bloom, who presides over the case, issued a court order for the trial to begin on July 6.
More importantly, the lawyers representing both sides confirmed that they are not planning to file any motions that could delay the trial and are eagerly looking to the opportunity to prove their case in court.
The war of words between legal teams
Dr. Wright’s attorney Andres Rivero told Cointelegraph that his client has always wanted to establish truth in court and there will be no delaying motions from their side:
“it’s always possible for the cases to be delayed, they could be motions, more requests by the plaintiffs […] But we have opposed all the delays and we’ve always wanted to go to trial. The plaintiffs would have to prove that there was a verbal agreement that 50% of everything that Dr. Wright did for the rest of his life belonged to Mr. Kleiman ”
According to Rivero, Kleiman was a dear friend of Dr. Wright. However, this did not entitle him to half of Wright’s Bitcoins (BTC).
In a statement released to Cointelegraph, Velvel Freedman of Roche Cyrulnik Freedman LLP, the firm represent Ira Kleiman, called those claims “absurd”:
“Any comment that Plaintiffs are responsible for any delays to the trial date is absurd. As Judge Bloom found on January 10, 2020, Craig’s ‘antics and conduct delayed and obstructed the discovery process of this case, wasted valuable time and resources […] and prevented the Plaintiff from obtaining evidence.’ Plaintiffs are looking forward to the trial.”
A Very Unusual Case
Rivero pointed out that the judge’s “sanctions against Dr. Wright were reversed, other than the fees”. Rivero does not have an estimate for how long the trial could take as in his opinion, the case has been “very usual”:
“Your guess is as good as mine, because this is the first time I’ve ever seen anything like this.”
Ira Kleiman, the brother of late Dave Kleiman, lays claim to the half of 1.1 million Bitcoins that Dr. Wright and Dave Kleiman allegedly mined together as part of the Satoshi Nakamoto team.
According to Rivero, his client, Dr. Wright still maintains that he is Satoshi Nakamoto, despite many detractors questioning it. Recently, John McAfee said that with 99% certainty, he knows the true identity of the author of Bitcoin whitepaper, hinting that Dr. Wright could be part of the Satoshi Nakamoto team.
Craig Wright Accused of Plagiarism Again
An anonymous blogger has again accused Satoshi claimant Dr. Craig Wright of plagiarism — this time in his doctoral thesis.
The man who claims to have written the Bitcoin whitepaper has been accused of committing plagiarism again, this time in his doctoral thesis.
PaintedFrog, the pseudonymous writer who previously accused Dr. Craig Wright of plagiarizing his 2008 law degree dissertation for Northumbria University, has posted his analysis of Wright’s 2017 PhD thesis from Charles Sturt University (CSU).
The blogger posted purported screenshots of Wright’s thesis, “The Quantification of Information Systems Risk: A Look at Quantitative Responses to Information Security Issues,” alongside several other publicly available sources.
Cointelegraph contacted Dr. Wright prior to publication of this story, and will update the piece with his response to the allegations if we hear back.
What Is Plagiarism?
PaintedFrog accused Wright of taking “huge swaths of content and reworded it to avoid automated detection tools.
In most cases, he simply substituted synonyms every few words”.
The difference between acceptable paraphrasing and outright plagiarism is something of a grey area. However, according to CSU’s own academic misconduct policy, plagiarism can be defined as:
“…rephrasing ideas from books, journals, study notes or tapes, the Web, the work of other students, or any other source without acknowledging the source of those ideas by footnotes or citations. This could include material copied from a source and acknowledged, but presented as the student’s own paraphrasing.”
The blogger claimed Wright did not properly acknowledge the sources of a number of publications. According to email correspondence with several university professors provided by PaintedFrog, CSU has reportedly begun an investigation into the matter.
PaintedFrog accused Wright of using content from “Data Mining: Desktop Survival Guide” published by Graham Williams in January 2008, “Ethical Hacking” written by Reto Baumann in 2002, and even an ornithology professor’s webpage.
The blogger suggested that Wright had made a few errors, such as an attempt “to obfuscate the equations by choosing different variable notation, but confused himself in the process and made a few errors, which are highlighted in red boxes.”
“In other cases,” the Medium writer noted, “Wright copied clear errors that were already present in the source material and did not correct them.”
PaintedFrog claims the “extensiveness of the plagiarism” overshadows any possible argument by Wright that “these are just a few mistakes.”
Wright Is Against Plagiarism
The Satoshi claimant himself has come down hard on plagiarists and wrote in a 2011 article that “plagiarism can be no different to receiving stolen intellectual property.”
“The damage done through plagiarism and the deception it entails damages not just those involved, but also the entire information security community when it is one of our own.”
Wright is highly protective of his reputation and has launched legal action against numerous figures in the crypto community that have accused him of fraud. PaintedFrog said he chose to remain anonymous to avoid potential legal action.
Sanctions Sought Over Craig Wright’s ‘False’ BTC Addresses and Courier Story
The Kleiman estate intends to file a motion for sanctions against Craig Wright claiming that a list of Bitcoin addresses he provided the court were fake.
The Kleiman estate intends to file a motion for sanctions against Craig Wright claiming that a list of Bitcoin addresses he provided the court were fake.
They also claim that he provided a “false notice” to the court about the mysterious bonded courier who Wright said would show up in January with the keys to Satoshi’s 1.1 million Bitcoin.
In A Motion For A Brief Extension To The May 8 Deadline Filed Earlier Today, Kleiman’s Legal Team Wrote:
“Plaintiffs intend to file a sanctions motion based on Defendant’s conduct in these proceedings. This motion will include, but not be limited to, the Defendant’s provision of a false notice and false list of bitcoin addresses in response to this Court’s order allowing him ‘through and including February 3, 2020, to file a notice with the Court indicating whether or not this mysterious figure has appeared from the shadows and whether the Defendant now has access to the last key slice needed to unlock the encrypted file’.”
They’re asking the court for a ten day extension to get on top of the 13 depositions conducted over the past two weeks to prove their case.
Trial Set To Begin In July
Cointelegraph reported yesterday the trial is expected to begin on July 6 and that the lawyers on both sides had confirmed they were not planning any motions that could delay the trial.
The ongoing lawsuit was brought by Ira Kleiman, brother of Wright’s deceased business partner David Kleiman. The Kleiman estate is after a share of the billions of dollars worth of Bitcoin (BTC) Wright and Kleiman allegedly mined.
Earlier in the case, Wright claimed he no longer had access to the BTC, which was held in the Tulip Trust and that a bonded courier would show up in January 2020 providing access. In January, he told the court the courier had shown up, and submitted a list of BTC addresses.
The case is not looking promising for Wright at this stage, as both Judge Bloom and Judge Reinhart have made reference to Wright’s provision of forged materials and perjured testimony.
Craig Wright Threatened To Crash The Bitcoin Price… So, What Happened?
There are many halving predictions yet to come true — among them, Satoshi claimant Craig Wright’s “long-term advance notice” from 2018 that he would crash the Bitcoin price.
There are many halving predictions yet to come true — among them Satoshi claimant Craig Wright’s “long-term advance notice” from 2018 that he intended to crash the Bitcoin price.
The warning emerged from a Slack group that Wright uses to communicate with his acolytes, and his dastardly scheme makes fascinating reading.
Dismissed At The Time
Wright’s sell-off threat came just prior to the much-hyped fork of the Bitcoin Cash blockchain to create Bitcoin SV.
Although there were some true believers who clearly relished the prospect of these events actually occurring, it was dismissed by many at the time as typical Wright braggadocio and self-promotion.
Rolling Iceberg Gathers No Moss
According to Wright, the sale would consist of a rolling iceberg order on a single exchange followed by significant orders on other exchanges. Iceberg orders are split into smaller lots with visible and hidden parts, the hidden parts only becoming apparent once the visible parts have been executed.
This was intended to significantly crash the BTC price and be matched with a 10x leveraged short to capitalize on this.
Simultaneously, Wright planned to throttle the network hash, rejecting all transactions other than “unrecognised SegWit TXs to miners and our own Exchange TXs.”
This was to occur via the addition of 51% of network hash power prior to the price crash, although no further details of how this would be achieved were given.
Computer Says “No”
As Cointelegraph reported, Bitcoin’s third halving event happened as scheduled, with the only untoward outcome so far being YouTube pulling the plug on our livestream party and a vague sense of disappointment from underwhelmed hodlers.
The hash rate has so far been relatively unaffected, and unless Wright was behind the weekend’s Bitcoin price drop, then we can only assume that the halving he’s planning to hatch his scheme for is the one due in 2024.
Looks like everyone can breathe easy again… for another four years, at least.
Motions Fly High As Craig Wright Set To Face Kleiman Estate In Court
Jockeying for position continues, but it looks like Kleiman v. Wright is going to trial. Still, never say never as most lawsuits settle.
The crypto news headlines at the start of May with regard to Kleiman v. Wright were mostly variations on the theme of Craig Wright’s Satoshi case going to trial. The two parties appear well entrenched in their positions, and lawyers for both sides have said they expect the trial to begin as scheduled on July 6, 2020, in Florida.
Does this mean there will be no settlement? “This is not like an ordinary commercial dispute where the parties can agree they’ve got a 50-50 chance of winning on an ambiguous contract provision, so they just split the difference,” Jason Gottlieb, a partner and the chair of Morrison Cohen LLP’s White Collar and Regulatory Enforcement Practice Group, told Cointelegraph, adding: “There’s a lot of money on the line, and for Dr. Wright, his reputation. It’s a relatively hard case to settle.”
A settlement requires “two to tango,” noted Florida attorney Bradford Patrick, and one of the parties here, Craig Wright, is no ordinary litigant. “There will be no resolution because he would rather play with fire to the end,” he told Cointelegraph. Still, “never say never,” added Gottlieb. “Most cases settle.”
Slapping Wright With Sanctions?
Meanwhile, skirmishing continues. On May 5, the plaintiffs announced their intent to file a sanctions motion, and on May 8, they filed a motion for partial summary judgment on the defendant’s affirmative defenses. What do we make of that?
Given defendant Wright’s behavior in the case, it isn’t surprising that the plaintiffs might file a sanctions motion — which basically punishes Wright for improper conduct — especially if they believed Wright submitted a false list of Bitcoin addresses in response to the court’s order, as claimed, suggested Grant Gulovsen, an Illinois attorney who focuses on cryptocurrency and blockchain matters. Gulovsen told Cointelegraph:
“This may not have much significance in terms of the ultimate outcome of the case, but to the extent that the crypto community believes strongly one way or another about the credibility of the defendant, I think this is very significant.”
And even if the plaintiffs do not prevail on the sanctions motion, added Gottlieb, it would “remind the judge of all the bad behavior that Dr. Wright has exhibited throughout the case, in the hopes of influencing any later close calls, and depriving him of the benefits of any doubts.”
As for the plaintiffs’ motion for partial summary judgment on the defendant’s affirmative defenses, this was made under seal due to the confidentiality order in place, so no one really knows what’s in it. Asked to speculate, Gottlieb told Cointelegraph:
“Frankly, I would expect plaintiffs to come out swinging in this summary judgment motion, and possibly eliminate some or all of the affirmative defenses in the case. It is possible that they may be shooting to affirmatively win the case on summary judgment.”
Nixing Expert Witnesses?
Also on May 8, Craig Wright filed a motion to exclude the opinion testimonies of five plaintiffs’ expert witnesses — including Andreas Antonopoulos, a crypto speaker and author of the book Mastering Bitcoin. The motion to exclude the experts is fairly straightforward and common, according to Gottlieb.
Whether a person has sufficient scientific or technical expertise to provide an opinion is up to the judge. With regard to Antonopoulus, for instance, Gottlieb believes that:
“If his only contribution is to submit a screenshot of a Bitcoin price, then, yes, I would expect he would be excluded. However, if he is providing expert testimony on the issue of how one discerns a Bitcoin price, I could see that as being relevant for expert testimony.”
Expert witness testimony is covered under Rule 702 of the Federal Rules of Evidence and Experts, noted Gulovsen, and in addition to being “qualified as an expert by knowledge, skill, experience, training, or education,” a witness can only provide opinion testimony if four other criteria that ensure the expert is reliable and knowledgeable are met — all in all, a fairly high bar.
According to the attorney, there are arguments to be made whether the first three witnesses fit the aforementioned criteria, while it’s more difficult to assess the other two as “the arguments are more nuanced.”
The plaintiffs are attempting to admit Antonopoulos’s testimony on economic damages — how much money the estate of David Kleiman is entitled to — in particular, what the “price” of Bitcoin was on certain dates to use as a basis to come up with that calculation. Gulovsen is of the opinion that:
“Since Antonopoulos is not an economist, he is not qualified ‘as an expert by knowledge, skill, experience, training or education’ to testify as to what the ‘price’ of Bitcoin was on a certain date, and should not be permitted to offer damage-related testimony.”
The plaintiffs are also trying to admit Antonopoulos’s testimony because of certain online communications purportedly authored by Satoshi Nakamoto. This, too, might be problematic because jurors can read Nakamoto’s communications — e.g., emails — themselves and decide. “And since Antonopoulos never met Satoshi and, admittedly, doesn’t know who Satoshi is, his testimony about the communications is unhelpful to the jury,” said Gulovsen.
Gordon Klein is a law professor whose testimony relates to the legal standards necessary for establishing an oral partnership in Florida. Gulovsen observed that testimony that relates to “what the law is” in a given case is improper because that is the job of the court — i.e., the judge — adding:
“As a result, Klein’s opinion not only fails to ‘help the trier of fact to understand the evidence or to determine a fact in issue but would likely confuse the jury as to what law should be applied.”
Matthew Edman is a computer scientist whose forensic analysis testimony relates to whether certain purported alterations to documents are “consistent” with having been made by Craig Wright. A problem for the plaintiffs here might be that “Edman has no formal training as a forensic expert and is, therefore, not qualified ‘as an expert by knowledge, skill, experience, training, or education’ on the subject of forensic analysis.”
In most cases, if experts are prohibited from testifying at a trial, it speaks more to the fact that the plaintiffs’ lawyers should have hired more appropriate experts — than failings of the experts themselves, Gulovsen added, summarizing for Cointelegraph that the defense’s possible arguments against the first three witnesses, including Antonopoulos, are still not clear cut: “I have no opinion as to whether the arguments will prevail.”
Victory On His Own Terms?
This lawsuit appears to belong to that rare class of civil cases where one party clashes irrespective of litigation expenses or legal fees or even any apparent economic consequences. The protagonists in such cases are often “egoists — who have loads of money — and can afford to fight to the end — win, lose or draw — to satisfy their own image as winners,” said Patrick.
“Settlement becomes unlikely because they chose to put themselves in the driver’s seat on the obstacle course in the first place. They desire victory on their own terms,” added Patrick, telling Cointelegraph that Wright is not likely to bury the hatchet with a settlement.
Gulovsen, for his part, said he would be surprised if this case actually goes to trial. “But if it does, the only thing I’ll be looking for is whether I’ve got enough popcorn stashed in the pantry to last for the duration.”
Craig Wright Denies Transferring ‘Satoshi’ Coins, Leaving Him In Legal Catch-22
Wright has denied moving 50 Bitcoin from one of the ‘Satoshi’ accounts he claimed in court as his own, leaving him in a legal quandary.
Bitcoin’s SV’s billionaire benefactor Calvin Ayre revealed Satoshi claimant Craig Wright has denied moving 50 BTC from a long-dormant address thought by some to belong to the Bitcoin founder.
On Wednesday, an unknown party moved 50 BTC — roughly $486,000 worth — from an address containing coins mined barely one month after the launch of the Bitcoin mainnet in 2009.
But in a Twitter response to Blockstream’s Adam Back, Ayre said it had nothing to do with Wright:
It was NOT Satoshi, I just spoke with him and Craig confirmed not him.
However the address in question, 17XiVVooLcdCUCMf9s4t4jTExacxwFS5uh, is among the 16,000 listed in a court document in the Kleinman v. Wright case, that Wright claims as his own.
The Catch-22 in this situation is that Wright has denied in court he has access to the private keys to the addresses, so if he said he moved the 50 BTC he’d be in trouble. However if someone else moved the coins, that would indicate the address does not belong to him, again leaving him in a potentially sticky legal situation.
If Ayre is to be believed regarding Wright’s denial, the latter could face serious complications in the ongoing trial. The judge has already questioned Wright’s credibility on more than one occasion.
Bitcoin Price Falls 5%
Prior to Ayre’s response, the movement of 50 BTC from the dormant wallet had many in the crypto community asking whether Nakamoto himself was back.
The wallet address is not one associated with the Bitcoin creator, but the 11-year gap in activity still caused a 5% drop in BTC price — from the $9,700s to $9,400s — when the news broke.
Wright’s denial should stem any fears he’s about to sell off a large amount of Bitcoin. In 2018, he posted an ominous warning on Slack, explaining in detail how he’d be selling a “large volume of BTC” around the time of a halving that would tank the price.
Others in the crypto community, however, are highly skeptical the tokens belong to either Nakamoto or Wright. Blockstream founder Adam Back thinks if the real Satoshi were to liquidate some of his holdings, he would choose a more anonymous address.
Early Bitcoin Miner Calls Craig Wright a Fraud Through ‘His Own’ Addresses
Craig Wright’s claim to thousands of Bitcoin addresses is shaken once again as 145 addresses with BTC from 2009 signed a message saying he is a fraud.
A message signed by 145 wallets containing Bitcoin (BTC) mined in its first years calls Craig Wright a “liar and a fraud.”
The message was published on May 25 with a list of 145 addresses and their corresponding signatures. This seemingly proves that the addresses do indeed belong to the person broadcasting the message. The message itself reads:
“Craig Steven Wright is a liar and a fraud. He doesn’t have the keys used to sign this message. The Lightning Network is a significant achievement. However, we need to continue work on improving on-chain capacity. Unfortunately, the solution is not to just change a constant in the code or to allow powerful participants to force out others.”
Notably, Cointelegraph was able to verify that all of the addresses can be found among the list of thousands claimed by Craig Wright in the case against Ira Kleiman.
Wright has on multiple occasions failed to produce proof of ownership of the alleged fortune of Satoshi Nakamoto, who is believed to have mined more than one million BTC.
An easy way of doing so is by signing a message with the cryptographic private key of the wallet in question, which can be checked with the public key.
Given that Wright tried to evade every occasion where he would have been forced to conclusively prove ownership, many in the community doubt that he owns those Bitcoins — and thus, that he’s Satoshi Nakamoto.
Is This A Message From Satoshi?
The signed message bears some similarity to a 2015 message coming from Satoshi’s email address, saying “I am not Craig Wright. We are all Satoshi.”
While the first part of the new statement rehashes the same concept, the message then expresses an opinion on the debates that ravaged Bitcoin before Bitcoin Cash (BCH) spun off into its own chain.
The blocks mined by this unknown person fall outside of the Patoshi pattern, which is the basis behind the claim that Satoshi mined more than 1 million BTC. Nevertheless, there is no absolute certainty in identifying which blocks are Satoshi’s and which are not. It seems likely that the similarity is a tribute to the alleged Satoshi message.
The early Bitcoin miner appears to have a middle ground position between Bitcoin and Bitcoin Cash. While he praises the Lightning Network, he also argues for higher on-chain capabilities. However, he does not believe that raising the block size, or “changing a constant in the code,” is the solution.
This is the second time in less than a week that an early miner suddenly showed activity.
What Happens Now For Wright?
The Kleiman case rests entirely on the assumption that Wright is Satoshi, which would entitle Ira Kleiman to half of those Bitcoins.
Wright has already been accused of perjury and forging documents, and the early miners’ activity put him in a tough spot for continuing to claim that he is Satoshi.
It is becoming ever more obvious that Wright has no access to those coins, which would nullify the long running case, set to enter trial on July 6.
Satoshi Didn’t Sign Craig Wright Message, Says Crypto Researcher
Researchers examine whether a message signed by a 2009 miner calling Craig Wright a fraud may have been signed by Satoshi Nakamoto.
On Monday, a Bitcoin (BTC) miner — or multiple Bitcoin miners — signed a message calling Craig Wright a fraud. One of the addresses used had been previously attributed to the creator of Bitcoin, Satoshi Nakamoto.
The message was signed with 145 signatures belonging to the 145 corresponding addresses, and one of those addresses — 12CTHhyJtr49LgoUShbWgebLBviLAFj6nj — was a coinbase address for the Bitcoin mined in block 30169.
Previous research conducted by Sergio Demian Lerner identified this block as one mined by Satoshi.
However, Lerner Told Cointelegraph That This Is A Case Of False-Positive Attribution:
“It’s a false positive. Clearly looking at the graph I see that the algorithm chose the wrong slope. The algorithm is not perfect. It’s explained in the post. When there is a ‘cloud’ of points, it just tries to pick the one that is close to Patoshi slope, having the right least significant byte attributes.”
BitMEX Research has also weighed in, concluding that two of the addresses used in the statement have “weak allocation” to Satoshi:
The blocks that BitMEX Research believes have a chance to have been mined by Satoshi are 30255 and 33270, which are not identified as belonging to Satoshi by Lerner’s algorithm.
Early Bitcoin Involvement
Whoever signed the message may have been involved in Bitcoin from its early days, as the blocks go back to 2009, when there were still very few miners besides Satoshi. The message read:
“Craig Steven Wright is a liar and a fraud. He doesn’t have the keys used to sign this message. The Lightning Network is a significant achievement. However, we need to continue work on improving on-chain capacity. Unfortunately, the solution is not to just change a constant in the code or to allow powerful participants to force out others.”
Also, they support the Lighting Network and do not believe an increase in block size is the right approach to improving on-chain scalability, which could be construed as them siding with the conservatism of the Bitcoin core community, not Bitcoin Cash (BCH).
Furthermore, their support for the Lightning Network may indicate support for Blockstream, the company co-founded by the inventor of proof-of-work consensus, Adam Back. His Hashcash was a major stepping stone for Satoshi and was cited in the Bitcoin white paper.
Since Satoshi Left The Project, There Have Been Very Few Messages That Might Be Attributed To Him. In 2014, He Declared:
“I am not Dorian Nakamoto.”
Perhaps Satoshi reactivates himself once in a while to steer the Bitcoin boat in the right direction.
Kleiman Lawyers Seize on New Evidence of Craig Wright’s ‘Fabrication’
The Kleiman estate’s legal team has seized upon this week’s revelation that 145 Bitcoin addresses claimed by Craig Wright are controlled by someone else.
The Kleiman estate’s legal team has entered into evidence this week’s revelation that 145 addresses claimed by Craig Wright are not controlled by him.
They filed a notice of supplementary evidence supporting their motion for sanctions against Wright earlier this morning, adding to their laundry list of complaints against the Satoshi-claimant.
They said the new evidence further proves the “CSW Filed List” is not a list of Wright’s Bitcoin public addresses but is instead a “purposeful fabrication” by him.
The Kleiman estate is suing Wright over the Bitcoin he allegedly mined in a partnership with the late Dave Kleiman.
‘Liar And A Fraud’
On May 24 2020 an unknown actor posted a message, signed with the private keys to the addresses on the CSW Filed List saying:
“Craig Steven Wright is a liar and a fraud. He doesn’t have the keys used to sign this message … We are all Satoshi”
The coins in the addresses were all mined between May 10, 2009 and January 10, 2010, with each holding the original block reward of 50 BTC — adding up to $64 million worth combined.
The Plaintiffs quoted Bitcoin expert Andreas Antonopoulos’ declaration that “You cannot sign a message in this way unless you have the private key to those addresses.”
Wrong List? Nope
Bitcoin SV (BSV) supporters believe the message was from early Bitcoin developer Greg Maxwell, who they claim has a vendetta against Wright.
BSV’s billionaire benefactor Calvin Ayre claimed the addresses are not on the official, sealed and final list:
“He presented an early list that was all possible ones his could be that is public…and then later when he was clear on his he filed this in court but its sealed so not public. No of the blocks Maxwell and other Fraudsters are using to attack Craig are on the valid sealed list.”
However as the Plaintiff’s supplement makes clear, the CSW Filed List was “mistakenly” filed by them on the public docket — giving the unknown actor access to them — and the 145 addresses are indeed on it.
The motion contains an extensive footnote on this, presumably in case the court felt this “mistake” was a little too convenient to be believable.
Wright Has The Keys
The Plaintiffs had already argued the list was a “forgery intended to deceive Plaintiffs and this Court, and that Wright created it to avoid sanctions pursuant to this Court’s Order”
They said the new evidence further proves this list is “not an accurate listing of Wright’s Bitcoin,and that he is still hiding the true list from Plaintiffs and the Court.”
“Said simply, Wright represented these 145 addresses were part of his Bitcoin holdings and were locked in an inaccessible encrypted file. This week, the person that actually controls the private keys to those addresses used those private keys … thus proving the addresses do not belong to Wright.”
While the new evidence was seized upon by many on Crypto Twitter as demonstrating once and for all Wright is not Satoshi, that’s not the position of the Kleiman team.
They still believe he has access to considerable BTC wealth and demand a share of it based on Wright’s alleged partnership with Dave Kleiman in mining the BTC. Last week they argued that Wright has access to the BTC holdings in question.
Despite Antonopoulos’ evidence the person who signed the message had access to the private key, Decrypt today quoted Bitcoin developer Rene Pickhardt as saying that it was still possible the addresses had been exploited:
“Of course security might be compromised and the signatures could only be created for this particular message but not for potential coin transfers.”
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