Guy Who Claims He Invented Bitcoin Loses $140 Million in Court, Calls It a Win

Guy Who Claims He Invented Bitcoin Loses $140 Million in Court, Calls It a Win
Photo: Mario Tama, Getty Images

After a week of deliberation, a Miami jury has cleared Craig Wright, an Australian computer scientist who claimed to have helped invent Bitcoin, of most claims in a multi-billion dollar lawsuit. The suit was brought by the estate of Wright’s now-deceased friend over the cryptocurrency’s intellectual property rights. But Wright still has to pay up $US100 ($141) million in compensatory damages — a titanic sum for most of us, but surely a relative pittance for a man who claims to be a billionaire dozens of times over, right? Right?

Wright claims to have worked on the team that developed Bitcoin and that he is to the one true “Satoshi Nakamoto,” the nom de guerre of the anonymous whitepaper that launched Bitcoin. There is plenty of evidence that these claims aren’t true, and his proclamations are widely disregarded in the cryptocurrency world as a fabrication. But the suit brought by the brother of Dave Kleiman, Wright’s deceased friend, took the assertion as a given and went further by naming Kleiman as a key colleague on the project.

The plaintiffs in the suit claim Wright cheated Kleiman out of the intellectual property rights to Bitcoin, according to Bloomberg. Kleiman’s family then sought a share of some 1.1 million Bitcoins worth around $US56 (A$79) billion (at the going rate of just over $US51,000 (A$71,068) apiece early Tuesday afternoon) which are thought to be held by Nakamoto as recompense. Those 1.1 million Bitcoins were some of the earliest ever mined and have not been touched since they were created. Wright argued during the trial that while Kleiman did help him out with the Bitcoin project, they only collaborated on mining the cryptocurrency for test purposes and not for profit. He also stated that after Kleiman died in 2013, he had “exaggerated” Kleiman’s contributions to the project to honour a dear, late friend.

Jurors ruled for Wright on most claims in the Kleiman lawsuit — meaning Wright won’t be forced to pony up (or explain why he can’t come up with) those 1.1 million Bitcoins. However, the jury did find Wright liable for conversion, which is effectively theft. They awarded $US100 (A$140) million in compensatory damages to be paid out to W&K Info Defence Research LLC, the firm where Kleiman and Wright supposedly invented the world-altering cryptocurrency. The issue of whether Wright is as rich as he says and thus actually capable of paying that judgment was contentious in court.

Wright has separately claimed to have lost the private keys to a digital wallet containing around 111,000 Bitcoin in a February 2020 hack on his home computer, and earlier this year he sued developers at four separate cryptocurrency networks in UK court as part of an effort to reclaim his lost bounty. As the Financial Times noted, Wright is not demanding the developers recover the allegedly stolen coins but replace them with fresh ones, which doesn’t seem to mesh with the founding ethos of Bitcoin at all. One of the defendants told Reuters that they don’t believe Wright has proven his ownership of the Bitcoin in question.

The UK also has far stricter libel laws than the U.S., which the Times reported Wright has happily used against people who contest his claims to have invented the cryptocurrency. In yet another lawsuit, Wright sued Bitcoin.org, saying its hosting of a copy of the original Bitcoin white paper violated his copyright. Wright won that suit in a default judgment in June 2021. Once again, it’s curious that the creator of Bitcoin would do something so openly in conflict with its libertarian ethos.

A lawyer for Wright, Andres Rivero, characterised the jury’s decision as a crushing blow to the plaintiffs.

“The plaintiffs were claiming $US600 (A$836) billion-plus punitives,” Rivero told Bloomberg in a phone interview. “This is one of the most resounding victories ever in American litigation. We had crushed them. Their result is less than any settlement offer we ever made to them. This is a total loss for the other side.”

In a video message, CNN wrote, Wright told supporters, “This has been a remarkably good outcome and I feel completely vindicated. There are still more fights. We are going to make everything change: cryptocurrency to digital cash the way it’s meant to be.”

“We are immensely gratified that our client, W&K Information Defence Research LLC, has won $US100,000,000 (A$ reflecting that Craig Wright wrongfully took bitcoin-related assets from W&K,” attorneys for W&K told CNBC in a statement.

As the Guardian reported, Wright has promised to prove he is Satoshi Nakamoto if he won the suit by transferring some of the early Bitcoins as well as donating some of the cryptocurrency to charity. Wright’s attorney confirmed to the Guardian that goal remains his intent.

Wright told Bloomberg, however, that he believes the verdict in the Kleiman case has settled the issue of Bitcoin’s creator: “The jury has obviously found that I am [Satoshi Nakamoto] because there would have been no award otherwise. And I am.”