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"You may or may not be aware that Craig Wright, the Australian former pastor and polymath who claims to be bitcoin creator Satoshi Nakamoto, is not only suing a bunch of people for saying he’s a fraud, but is also himself being sued for only being 50 per cent Satoshi (while the people who he’s suing believe he is zero per cent Satoshi).
The man suing Wright is Ira Kleiman, brother of the late Dave Kleiman, an American computer engineer who Ira says helped Wright invent bitcoin. Ira has argued that his brother’s stash of coins and his intellectual property rights were “seized” in a malicious scheme perpetrated by Wright after Dave’s death in 2013. He’s been suing Wright on behalf of Kleiman’s estate for half of the bitcoins that were apparently jointly mined by Wright and Kleiman (as “Satoshi”) between 2009 and 2011 — a stash of around 1 million bitcoins or around $10bn — as well as half of the IP.
Wright has denied the partnership, and has argued that all his bitcoins are tied up in the “Tulip Trust”, which he says he cannot decrypt until he gets access to the key from a bonded courier in January, 2020. (It’s literally like a scene from Back to the Future.)
It’s been a pretty interesting case to watch, given that most of the major players in bitcoinland think that Wright is a liar, and given Wright would have to produce some evidence to establish whether or not he was in fact a liar.
But it seems that he failed to produce any such evidence. And now, a US judge has decided that Wright is indeed a liar. And not only that, but a liar under oath — a perjurer!
On Tuesday, Magistrate Judge Bruce Reinhart produced a decidedly spicy court order:
Apparently, dead men tell no tales, but they (perhaps) send bonded couriers. See John Dryden, “The Spanish Fryar or The Double Discovery”, Act IV, Scene 1 (1681) (“there is a Proverb, I confess, which says, That Dead men tell no Tales.”). I completely reject Dr. Wright’s testimony about the alleged Tulip Trust, the alleged encrypted file, and his alleged inability to identify his bitcoin holdings.
The evidence establishes that (Wright) has engaged 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 order came less than two weeks after District Court Judge Beth Bloom said in a court order that Wright had “failed to present credible evidence”. While Judge Reinhart was compelled to turn to tragicomedy in his order, Judge Bloom turned to poetry, quoting Walter Scott: “Oh! What a tangled web we weave when first we practice to deceive.”
Judge Reinhart establishes in his order that, for the purposes of the case, “Dr. Wright and David Kleiman entered into... 50/50 partnership to develop Bitcoin intellectual property and to mine bitcoin”; that “any Bitcoin-related intellectual property developed by Dr. Wright prior to David Kleiman’s death was property of the partnership”; that “all bitcoin mined by Dr. Wright prior to David Kleiman’s death (“the partnership’s bitcoin”) was property of the partnership when mined”; and that “plaintiffs presently retain an ownership interest in the partnership’s bitcoin, and any assets traceable to them”.
What the order does not establish is whether or not Wright was indeed Satoshi — either part of him, or all of him. It also doesn’t establish whether Wright has the $10bn in bitcoin that he says he has. In fact the order explicitly says:
...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. The Court is also not required to decide, and does not decide, how much bitcoin, if any, Dr. Wright controls today.
But of course, that didn’t stop Team Craigtoshi from saying that this was an endorsement of Wright’s claims to be Satoshi, just like a registration with the US Copyright Office was an official “recognition”. Online gambling tycoon and Bitcoin SV shill Calvin Ayre took to Twitter on Wednesday:
The other thing that the judge did not do — though this has been very widely reported, was order Wright to hand over half his stash. The case is actually not over yet. We called up Stephen Palley, a Washington, DC-based lawyer who specialises in all things blockchain and crypto, to get clarification on this.
He said to say Wright had been ordered to pay up $5bn was incorrect, and that the case could drag on for another six months to a year. He did add, however:
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.
Palley said it was extremely unlikely now that the case would go to trial, and that it would instead probably be resolved by a “summary judgment” — a court decision that at full trial is not necessary, so essentially a trial on paper — and that Wright was highly likely to lose.
We also got in touch with Wright’s people to ask for comment, and were directed towards an interview Wright gave to Modern Consensus on Monday, after the initial recommendation in court.
It seems that the interviewer, Brendan Sullivan — a man who recently penned a piece entitled “New Prime Minister Boris Johnson needs to turn to crypto before the EU turns on him”, arguing that BoJo “could ease Britain’s currency crisis by investing in cross-border crypto payments such a Facebook’s Libra” (ahem) — is a long-term fan of Wright. At one point he says:
I know people think you’re a miserable pr**k. But you once told me that you and your wife had decided that this $10 billion fortune was too much. You said you worried about what it would do for your kids.
To which Wright responds:
It’s f***ing scary. Now the kids are going to know that we have the other $5 billion. And it really sucks. Imagine that (laughs). I had planned to live a long time and hopefully they wouldn’t know until they were older and we were gone. It could affect their whole lives.
A strange concern for Wright, particularly given that he told all of us at Vaudeville — or #ftalphavillepresentsvaudevillethefyrefestivaloffinance — last month that he was going to give away an $8bn bitcoin stash (at then-current market rates) to charity, which was widely reported, by publications including Calvin Ayre’s own Coingeek. Surely this is not, then, a revelation for his kids? We presume that Wright still intends to give away the other few billion, so why will this affect their whole lives?
But anyway. Either Wright is only half of Satoshi and the world’s poor are only going to get a few billion because the Kleimans are going to get the rest, or Wright is the whole Satoshi but the world’s poor are still only going to get a few billion because US courts don’t believe in Wright, OR the world’s poor are not about to be given any number of billions of dollars, because Wright’s not Satoshi and doesn’t have $8bn, or $10bn for that matter. Who knows??
Either way, seems like the life of Craigtoshi has the makings of a West End musical one day. Or at least a Netflix series. Oh. "
