Self-proclaimed Bitcoin inventor largely prevails in $54B Bitcoin trial
reuters.com
reuters.com
It's beyond disputed; the man can literally sign a message at any point in time that he likes that would definitively prove his claim, and he refuses. This to me is proof positive that he is lying. Someone who built a cryptosystem for artificial digital scarcity, who relied entirely on digital signatures to prove pseudonymous identity would absolutely 100% prove their claim using these methods. Craig Wright is an obvious fraud.
The article is not very informative about the case, I'd love to know more about why some bitcoin mined by satoshi nakamoto, supposedly owned by a man claiming to be satoshi nakamoto, was under the possession of someone else and needed a trial to return possession to him.
So it isn't just that if it were true he could trivially prove it with a digital signature-- but that the true owners of many coins he claimed to control have stepped up and provided signatures saying that they're not Wright!
Unfortunately, Wright and his conspirators are spending millions to support and prolong their fraud and so it's no great difficulty for them to more or less control the media presentation of the situation.
Wright has scored some extremely wealthy sponsors who have been loaning wright money in exchange for a share in his fictional treasure. So I think it's possible that he'll actually be able to pay for a settlement in this case using their money.
It's an astronomical amount of money, but the amounts of money being pumped into wrights con have been astronomical for a long time. $100m wouldn't even be particularly disproportionate compared to what's gone into propping up TAAL, for example.
It's also possible-- even likely-- that he just won't pay it. I believe he still owes $60k-ish for a judgement for legal fees in an action in Norway, which he's owed for well over a year. He went over a year before paying legal fees he owed Adam Back for an aborted defamation lawsuit against Back.
Civil recovery can be spotty at the best of times, and in this case we're talking about someone whos already fled one country to escape his legal problems and has established citizenship in a location known to block extraditions for criminals (including Wright's business partner / primary victim, Calvin Ayre who spent a decade on DHS's most wanted list).
We all know CW is a fraud.
Or, I should say I'd find it fascinating if I weren't a target and a victim of it. :( being forced to live it is less than fun.
On the other hand, I do want to respect their wish to stay anonymous.
Whomever that person is, it must feel very weird. They either still have access to the private keys and are, on paper at least, in the top 10 richest people in the world. Or they no longer have access to the keys and must feel some form of "loss".
Or it was never a person and always an organisation. So many unknowns :-)
There must have been countless investigations into this. Journalists, governments, shady organisations. It's hard to imagine no-one has uncovered Satoshi yet.
They're so good at fingerprinting it's crazy. I highly doubt that they wouldn't be able to identify the person / people behind Satoshi.
My belief is that they've sadly passed and were either https://en.wikipedia.org/wiki/Hal_Finney_(computer_scientist... or another relatively quiet engineer.
That kind of wealth in Bitcoin is a strange case. After a certain point, money doesn't mean anything material and comes closer to a proxy for measuring power.
Typically, people who are worth tens of billions have a lot of power. A big voting stake in a huge tech company is, these days, probably more power than a senior US senator.
What does $50B in bitcoin mean (regardless of whether it'd be possible to liquidate)? It's an interesting question.
For all we know somewhere there's a wallet whose password is the first sentence from Moby Dick, or one of Hamlet's speeches.
I do appreciate your curiosity, but thank you for understanding. To date, to my knowledge, no-one ever guessed correctly, and maybe that's for the best. If they'd have wanted anyone to know who they were: they'd have said. They never have, and likely never will. I don't think you'll ever see anything from the genesis block or those keys. It's got to feel incredibly strange, yes, but remember: they _wanted_ to walk away from the whole thing, and I feel strongly that deserves respect.
Yikes.
We live in a world in which the vast majority of people -- including the vast majority of judges and journalists -- lack the education necessary for understanding the fundamental building blocks of modern computer security. They do not understand, cannot explain, and cannot reason about public-key cryptography. The notion of "proving ownership publicly by signing a sequence of bits with a private key" is utterly foreign to them. Our hopelessly outdated educational system deserves the blame for this widespread lack of education.
This case wasn't even over Wright being Satoshi or anything like that. And the outcome of the case was that the jury apparently didn't believe wright's claims of creating or mining bitcoin.
They found Wright civilly liable for $100 million in damages for raiding his dead friends business by impersonating it in AU court, which he essentially admitted to in court (though obfuscated by claiming it was normal business practices to engage in sham lawsuits against yourself).
So all this stuff about Satoshi this and that are pretty much entirely incidental to the court, and to the extent it came up at all the jury didn't fall for it. This is entirely the opposite view you'd get from the mass media articles because they're all parroting lightly "balanced" press releases from Wright.
Double-yikes :-(
Not so fast. A trial with this large an amount at stake goes to a pretty senior judge. Blaming the public educational system of, say, 1975 for not teaching private key is... a bit misguided. (If they came out of the public school system in 2010, I could see your case. But I'd bet the judge of this case didn't...)
Not really a crypto person, just very curious and the article is lacking detail! Thanks!
I'm in a similar boat. I honestly can't wait until the tax rules around cryptocurrencies are finally fully hashed out, clarified, and published.
AU has a program where if you spend money on R&D you can get a refundable tax credit-- not just a deduction, but like EITC in the US they'll actually cut you a check.
Wright spun up a collection of companies that engaged in no business (or research) except claiming these tax credits. According to his own companies documentation, all in all he claimed to have performed $200m in research and requested $65m in credits. The first year he attempted this he did it with smaller values and they paid out, but in later years he tripped audit alarm bells.
The AU tax office immediately started asking where he got the $200 million that he claims he spent on research. This is the origin of Wright claiming to have invented Bitcoin: he claimed he had some enormous trove of bitcoin's held overseas and that his companies were funded by taking out loans against them. Wright made a massive amount of forgeries to support his claims across a couple years of fighting with the ATO.
The tax office thoroughly debunked and discredited wright's lies and forgeries and found against him, ordering him to repay the money. At that point Wright took the show on the road, literally: He fled AU while the police were raiding his offices, and started selling shares of his fictional fortune and fictional intellectual property to others in order to cover the AU clawback and finance his lifestyle.
Since then his life has been a series of forced moves, lie after lie in a growing snowball to delay the collapse of his con. For example, for a while he held off his "investors" (victims) by claiming that the Bitcoins were in trust and would be delivered by a bonded courier in Jan 2020 (like that scene in back to the future 2) -- but after that date came and went he claimed that the coins were delivered by were stolen from him by hackers that hid a wifi pineapple in his home and that now he's going to get them back by suing Bitcoin developers to backdoor the system to return them to him.
https://www.reuters.com/world/uk/london-court-allows-austral...
In a related case, he's trying to get them to 'give' him the Bitcoin he doesn't have a key for. Weird sort of thing. It sounds unlikely that any fork that permits this would have any sort of support.
EDIT: Never mind, here's the actual case https://casetext.com/case/kleiman-v-wright-14
I read part of it but it looks like they mined a huge bunch of BTC and put it in a trust and the Kleiman side argued that Wright impersonated him (in some way, didn't read too deep) to transfer that to himself. If this is right, this guy is rich as fuck. Sounds weird for him to be suing the bitcoin devs to get a tenth as much through a hard fork so one can assume he fucked something up along the way and lost the keys to that stuff.
It's like 1.1 million BTC (50 billion USD at current price) right now. That's wild.
So what's the logic behind it? I mean - he must be able to see that it's a non-starter?
Background: Wright has sued a dozen former and current Bitcoin developers, demanding that they publish backdoored Bitcoin software to allow him to take coins which are unambiguously not his, and failing that he demands they pay him roughly $7 billion USD in damages.
Obviously the case isn't even intended to be successful, it's intended to take a long time so that Wright can continue selling shares in Bitcoin he doesn't own and will never have access too, and to harass people who wouldn't aid his fraud in the process.
Of course, this attack vector would be moot if all miners were anonymous and all contributors to code were anonymous, or if all amounts and addresses were private. Maybe Craig Wright deliberately made the bitcoin blockchain transparent so he could perform this attack later (/s if it's not obvious).
Wright has already attempted this: He has a fork of Bitcoin called "Bitcoin SV" (satoshi's vision) which he claims is the real Bitcoin and that Bitcoin is an imposter. Today it has well under 1% of Bitcoin's hashpower, well under 1$ of Bitcoin's price (and has fallen a LOT relative to Bitcoin), and it's now down to less than 40 reachable nodes. Most of the few exchanges that have ever had it have dropped it, and it has recently had suffered some extremely severe reorg attacks -- causing millions of dollars in losses to at least one exchange.
For the purpose of Wright's backdoor demands miners are irrelevant. If contributors were all anonymous you'd have the problem that they might actually be wright. He's even suing former developers like me, who haven't contributed for a couple years (or more!) ... really the targets of the lawsuit don't have much connection to reality. And the more obscure you make it to get the software the more ability he'd have to just setup impersonation sites to get people to run his malicious version instead.
Also, anonymity hasn't helped that much in the case of the owner of Bitcoin.org-- being anonymous just caused him to lose in a default judgement when Wright sued him because the UK will not allow an anonymous party to defend themselves. Ultimately they'll likely have to deanonymize to prevent Wright from seizing Bitcoin.org.
Addresses being private wouldn't really change anything about Wright's attack. He'd still demand to be given coins just the same. In fact, as of the moment Bitcoin is anonymous enough to severely frustrate his efforts: He claims to "own" 1.1M BTC but right now he's only suing developers for a backdoor to acces 0.111M of it, because whenever he'd claimed specific addresses for more he's gotten nailed by the true owners signing messages. So right now he's only going after a smaller portion where he can be confident the current controlling party won't speak up (the bulk of those coins were stolen from MTGox and haven't moved since).
The default judgment to me is a flaw in the legal system, if an anonymous party cannot defend themselves, how can an anonymous party be sued? This default judgment is a shame. The proper default judgment should've been "who exactly are you suing?"
He can't demand coins he doesn't even know exist, he can't even prove the coins exist to a court without keys to show that they exist. Being private would absolutely prevent this vector, he'd have to have the keys to prove to a court he owns the coins, which means he wouldn't have to prove anything to a court, he would only have to move the coins.
Interesting vector with impersonation sites, I'll have to roll that one around in my head for a while.
Agreed. But imagine that there is no normie accessible place on the web to get non-malicious Bitcoin software. And anyone running a site distributing it is at risk if their identity is leaked. What effect is that going to have in the long run?
"There are levels of survival we are prepared to accept." -- Bitcoin would survive in such a state, but I don't think it would be a great outcome.
> The default judgment to me is a flaw in the legal system, if an anonymous party cannot defend themselves, how can an anonymous party be sued? This default judgment is a shame.
Fully agreed.
> He can't demand coins he doesn't even know exist, he can't even prove the coins exist to a court without keys to show that they exist.
He's actually argued that he could just demand the developers issue more coins too. And he doesn't have keys, but that isn't slowing him down!
The big legal flaw he exploits is that if you go to trial it can be extremely expensive (esp in the UK where you pay the other sides legal costs for every failed motion, and wright sticks a whole firm on his case). ... normally the expense of trial is protected against by preliminary motions like summary judgements. But in a summary judgement the court assumes all disputed facts favor the non-movant, and wright fills his cases with forgeries to makeup whatever disputed fact he needs to keep the case going. The huge volume of forgeries which require expert analysis and debunking also add massively to the cost of being in litigation with him. His goal isn't to win (though I'm sure he'd be happy if he did)-- his goal is to burn time and the opponents resources.
This is where we get off in the weeds about the architecture of the internet. Ideally, we would have a decentralized domain registry and everyone would use tools like onion sites for everything. Hopefully that is the outcome, but likely not.
The common thread is that they are defendable against, but not without potentially losing your anonymity. So someone can turn up to contest the injunction against the protestors, but whether their name is made public is then in the hands of the judge (public justice normally means that parties names are in the public domain). Likewise, the anonymous contributor could show up to make a case (the court will have tried reasonably hard to effect service so they're aware) but at significant risk to their anonymity, which is only going to be defended by the judge on public interest grounds, not simply because the contributor would prefer it.
While this can lead to harsh outcomes, it's not completely without sense. 'I'm hiding, you can't sue me' creates a hole for lawless behaviour, and the legal system is more or less intended to stop that kind of thing.
In this case we have a lot of reason to believe that the plaintiff brought the case exclusively to learn the defendants identity. E.g. Before bringing the action they offered $10 million dollars to acquire the domain, and have made threatening remarks. Not to mention no actual advantage is gained by removing the Bitcoin whitepaper from a single website, as there are easily found mirrors on thousands of locations all over the world, and since Wright's initial threats that includes the websites of several national governments, US congress, research institutions, and some of the largest financial institutions in the world (e.g. Fidelity).
This privacy invasion belief was only furthered when after the case the plaintiff refused to accept the ordered costs payment from anyone except the defendant and only if they identified themselves (also, after the case the plaintiff pretty much said as much).
Their case was seriously deficient too, e.g. falsely misstating that a US copyright registration was evidence of authorship even when the copyright office had made an unprecedented move of saying exactly the opposite in the matter of this specific case. Failing to disclose that there were other copyright registrants, failing to disclose that the supposedly infringing whitepaper was distributed under the MIT license and so on. Not to mention that there were major equitable issues, e.g. the whitepaper has been on the website pretty much since it was written some 13 years ago without issue-- placed there by its (actual) author.
Cobra wrote a letter to the judge and attended the hearing via zoom, and the judge took the position that he was required by the law to ignore the letter.
But at the end of the day the UK courts are powerless to protect cobra from harassment or even assassination so exposing his identity just didn't make sense. Particularly since Cobra is outside of the UK (or so I believe, no one in the bitcoin ecosystem seems to know cobra by any other identity).
And this is why you can't access the Bitcoin whitepaper at its original location or download the bitcoin software on bitcoin.org from within the UK today.
They're now seeing an additional nearly million usd worth of costs for their unopposed default judgement too. O_o
For me, the question is not so much whether the respondent should be anonymous from the legal system (I think fairly clearly not) but whether there should be a scope of anonymity from the claimant and the public (a reasonable case here, I think, as none of the copyright issues really turn on the respondent's identity) and whether the application could be made without putting the identity on record first. And the High Court, against a deep pocketed opponent, without my own legal team, is not an ideal venue to try to find out. And, depending on Cøbra's opsec, it may be that they would be exposable via a third-party Norwich Pharmacal order anyway :-/
The costs are really in the same problem space as the main claim, I think: an application for costs to be assessed would probably dramatically lower the amount 'reasonably' due - but that would mean appearing as a party. [edit: not to say it wouldn't be ruinously expensive anyway - I see the summary assessment of costs up to summary judgment already runs to £35k. The High Court is not cheap.]
The tricky thing here is that what Cobra needs isn't protection from the public, -- which would be hard to provide with any reliability but at least is conceptually not challenging, but privacy from the plaintiffs -- because he has a reasonable fear that the plaintiffs will use the information in some criminal way to harm him.
(Also because in another case Wright went ahead and publicly disclosed the identity of a confidential witness that the court had sealed, and Wright suffered no consequence for it.)
I think privacy from the plaintiffs is harder conceptually, because there may come some point where there needs to be a factual argument that depends on their identity-- certainly the plaintiffs would push as hard as they could in whatever direction they needed to accomplish that-- including, based on prior conduct, forging documents to support a false narrative.
[One of the reasons we think they've been trying to get Cobra's identity-- beyond just threatening him with it-- is that we know wright has told people that Cobra "stole" bitcoin.org from him, but since he knows nothing about who cobra is or how he ended up in control of Bitcoin.org he can't fake up any documentary support for this fiction.]
It's unclear if they could obtain Cobra's identity from a third party. They certainly tried pretty hard. When they were trying to obtain my address they used a storm of pretexting phone calls and such. At least they tried very hard, and were unsuccessful absent an order.
Yeah, indeed, Cobra has the same problem with costs-- he's having a difficult time within the legal framework of challenging them without exposing his identity.
>Ultimately they'll likely have to deanonymize to prevent Wright from seizing Bitcoin.org.
I didn't know this was a risk. It would actually be a mild disaster if bitcoin.org was compromised. If Cøbra wants to remain anonymous, one idea is to transfer the domain to one of the current bitcoin devs whose identity is public (and maybe transfer it back once this blows over?) I don't know if it's too late for that, given the domain is already the subject of a lawsuit. The whole situation sounds like a mess. I'm sorry you got wrapped up in it.
Wow that's a shitty move. Have you had to retain a lawyer to deal with this nonsense? I was once sued over some open source software I wrote, because one of the keywords used in the DSL was the same as a completely unrelated trademark. As you can imagine the whole lawsuit was baseless nonsense. Luckily they also sued my employer who happens to be Red Hat and our legal department stomped on the claimant for me.
Wright is unusually challenging even compared to the more typical litigation trolls, because he puts out a lot of forged documents that make it harder to establish a clear set of facts to kill a case in preliminary motions, which cost a lot of expert time to debunk, and carry a risk that a less technical judge/jury might be snowed by them in spite of expert debunking.
This problem doesn't usually exist because in the long run the forgeries will make him lose... but he's not playing for the long run, he's playing to just keep it going as long as he can.
Fortunately the community and industry has been able to step up and provide financial support, so far. But that doesn't replace the time and stress of dealing with it and only partially addresses the chilling effect.
I heard that he's also just recently sent threat letters for two more unrelated lawsuits (sent by a separate set of shell companies), one alleging that the Bitcoin developers are infringing his "database rights" through their use of the Bitcoin blockchain without his permission, and one alleging that their use of the word "Bitcoin" is "passing off" (how he's going to argue that without a trademark is mystifying to me) and he's been saying in public that he's planning a patent lawsuit too.
I know them well, all the way back to the 90s. Good luck with your case against him is all I can say.
This wouldn't be the case for legacy systems that depend on trusted third party authorities.
What it does tell you though is how much nonsense people will treat seriously. The same media that is misreporting on Wright's litigation is also the same media saying that Bitcoin is a big deal. :)
The only way a fork would work if the "owner" were to promise most of it to at least 51% of the current miners.
Is all that correct?
What would probably actually happen is that such a fork would be obviously illegitimate to users, exchanges, etc and people would use the unforked chain deliberately, and after some hash rate adjustment and delayed block times, the forked chain, even with 51% of the hash rate, would be close to valueless. Miners don't like mining valueless chuck e cheese tokens, so their hash power would return to the broadly accepted network.
This BTW demonstrates a security property of PoW that you don't get with PoS: you can't mine two networks with the same hash power, you have to pick one or the other. If bitcoin were a PoS system, validators could just stake both chains and make a riskless bet on the winning one, and even benefit from both.
Given that $50B are at stake, I could see things getting weird.
Node: “No”
Sam: *ICBM rolls out*
(I’m not saying they would, I’m saying they could).
I'm not a lawyer, but I'm skeptical that a judge's ruling could force Congress or the President to deploy intercontinental ballistic missiles. I don't think that's ever happened, and (as you say) this won't be the time it does.
I mean, Uncle Sam isn’t an actual person either.
Even if the wealth tax is 90%, 10% of $50B is a lot better than 0% of $50B.
CSW knew he would never convince Bitcoin, so he decided to use the State to force the return of coins that do not belong to him. Only his sycophants in BSV would agree to such treachery.
Which in itself should be more evidence that this man is not Satoshi.
Dec 7, 2021 Bcash price, $481.53 (approx 0.00944385 BTC)
Today, it has 0.74% of the Bitcoin hashrate.
Since its creation, it has lost 92% of its value in Bitcoin. So yes, bcash is awful. Don't touch the affinity scams.
In case it's not clear, even if the court did this and was able to enforce it, they would still need to enforce it outside of the country too, where, if I'm not mistaken, the majority of miners are.
I confess I replied something through a lens of personal irritation: For years the Bitcoin ecosystem has treated wright like a troll "he just wants attention, ignore him" -- but in doing so it's really enabled his fraud to grow and become a big problem.
So you triggered thought of people switching to a "oh it's good if he obliterates these people, it'll prove Bitcoin is anti-fragile!" ... well, sorry for being cynical. :)
Bitcoin absolutely would survive his attack here, whatever happens. Though it may be a setback, e.g. if it creates a big incentive against people of high capability, integrity, and experience to contributing to maintaining the software.
What would happen, worst case scenario, is that the "official" codebase gets code included to give him his rightfully owned monies, but an unmolested "fork" would be adopted by the network and continue on as the widely used codebase, probably contributed to by the same people, possibly under pseudonyms to prevent this horse shit in the future.
The US frowns on compelled speech and compelled labor. :)
> but he can't force the miners to use that codebase.
Miners aren't the relevant party of interest-- users are. He can't force users to adopt a version of Bitcoin that allows blocks which steal coins.
> What would happen, worst case scenario, is that the "official" codebase gets code included to give him his rightfully owned monies
Nah, that wouldn't happen. That repository would be shut off before that would happen, not only for ethical reasons but because anyone who distributed such maliciously backdoored software would be exposed to litigation by everyone else, especially if Wright established that in practice open source developers could be found civilly liable even though their license has a hard bar against that kind of liability.
> but an unmolested "fork" would be adopted by the network and continue on as the widely used codebase
Indeed, there are already many forks and alternative versions.
> probably contributed to by the same people, possibly under pseudonyms to prevent this horse shit in the future
That I doubt. It's not worth it to take the risk of millions of dollars of legal fees to contribute to a volunteer open source project.
He didn't. The jury found him civilly liable for $100 million USD in damages.
They didn't find that he had to hand over half the fictional bitcoins he claimed to have, -- presumably because they rightfully realized it was all a bunch of bullshit.
The fact that both industry and mainstream media articles are all just paraphrases of Wright's press releases is an example of how broken human journalism is these days.
If they'd found against him on the other claims at least he'd be able to say that the jury certainly bought into his claim of owning a ton of early Bitcoin. There would have been much more damages, but $100 million or $25 billion will bankrupt him equally either way.