8 ms·

Craig Wright ordered to hand over half of his alleged Bitcoin holdings

91 points by gcoleman 7y ago

tomglynch 7y ago
Seems it was proven he doesn't own those bitcoins, so he's meant to be handing over half of nothing, which is still nothing. Edit: My statement is incorrect. The amount of bitcoins Craig Wright has access to was not determined in the case, but potentially could be none.
- FDSGSG 7y ago
  How could you possibly prove that he doesn't own those bitcoins? You can prove control, but not lack of ownership unless you just burn the coins.
  - sp332 7y ago
    Well, he has been claiming to own them. So the court ordered him to hand over half. I guess he could now try to convince the court that he doesn't own them.
    - steve_taylor 7y ago
      He failed to prove that he’s the inventor of Bitcoin. That doesn’t prove that he isn’t.
      - letstrynvm 7y ago
        If he was though, it'd have various implications such as it not being difficult to prove he had access to his own private keys. I can imagine you might be the guy and not want to prove it, or it to be known. But actively claiming to be the guy and not proving it indisputibly when you could... what'd be the point?
      - andirk 7y ago
        Besides having private keys to early wallets, my #1 reason to not believe him is his arrogance and loving attention. The Nakamoto(s) that wrote the white paper and spoke on forums about it was/were very anonymous and privacy-obsessed.
  - dunkelheit 7y ago
    Wright tried to prove that he doesn't control the bitcoins he mined prior to 2013 due to blind trusts, secret sharing schemes and various other excuses. The court ruled that this story is hogwash.
    - DagAgren 7y ago
      The actual situation is this: Wright does not control those bitcoins, because he is not Satoshi Nakamoto, just a conman. He tried to explain the fact that he can't control them with the nonsense story about blind trusts, which the court soundly rejected for being a very obvious lie. The court never decided on whether or not he was Satoshi Nakamoto, as both parties are happy to proceed on the assumption that he is.
      - crtasm 7y ago
        Expanding on that, from TFA: "Reinhart said at the start of his ruling the court “is not required to decide, and does not decide” whether Wright is Nakamoto, and the court was not required to decide and did not decide how much bitcoin Wright controls today."
    - Vespasian 7y ago
      Money quote: "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. Dr. Wright’s story not only was not supported by other evidence in the record, it defies common sense and real-life experience." The Judge goes on to dismantle Wrights claims. He does not believe one bit of this fairy tail.
- Nursie 7y ago
  He claims to have them, but not have access to them, as part of a team who invented BTC. This court case awards half of his alleged holdings to the beneficiaries of the estate of his alleged partner. His ownership of the coins or the validity of his claim to be Satoshi never came up in this case AFAICT...
uoylj 7y ago
Wizsec commentary: https://blog.wizsec.jp/2019/08/kleiman-v-wright-part-5.html https://blog.wizsec.jp/2019/08/kleiman-v-wright-part-5.html Full court ruling: https://www.courtlistener.com/recap/gov.uscourts.flsd.521536/gov.uscourts.flsd.521536.277.0.pdf https://www.courtlistener.com/recap/gov.uscourts.flsd.521536...
d33 7y ago
This is absurd on so many levels. For example, it's pretty obvious that Bitcoin cannot be valued based on its exchange price in such huge quantities - if any party decided to sell $5bn worth of BTC, the price would obviously go down dramatically at this point. What's the logic behind this order?
- 9nGQluzmnq3M 7y ago
  There are indeed many absurd things about this case, but that's not one of them: the value of anything will collapse if you try to sell a significant fraction of the world's total supply at once.
  - sk5t 7y ago
    "I'm sorry, your honor, the laws of supply and demand make it unpalatable to comply with the court's order."
    - 9nGQluzmnq3M 7y ago
      As noted elsewhere, the court is demanding that Wright hand over half the bitcoins, not $5B in USD.
      - sk5t 7y ago
        I agree, although this is not the point to which your original post, and my concurring post, respond. Had the court ordered liquidation--of bitcoin, hogs, apartment blocks, whatever--it seems unlikely that market volatility would stay the court's hand. (Again, we agree about this.)
- throwamay1241 7y ago
  I see you're new to Australian media reporting standards, or lack thereof =)
  - whyenot 7y ago
dunkelheit 7y ago
(IANAL) The headline is misleading. From the court order: "the Court deems the following facts to be established for purposes of this action: (1) Dr. Wright and David Kleiman entered into a 50/50 partnership to develop Bitcoin intellectual property and to mine bitcoin; (2) any Bitcoin-related intellectual property developed by Dr. Wright prior to David Kleiman’s death was property of the partnership, (3) all bitcoin mined by Dr. Wright prior to David Kleiman’s death (“the partnership’s bitcoin”) was property of the partnership when mined; and (4) Plaintiffs presently retain an ownership interest in the partnership’s bitcoin, and any assets traceable to them". Also from the order (and quoted in the article): "The Court also is not required to decide, and does not decide,how much bitcoin, if any, Dr. Wright controls today. For purposes of this proceeding, 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." In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn.
- viach 7y ago
  > In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn. If Wright is in legal field, I suppose he is in some way forced to make his Bitcoin sell orders public (taxes, anti-laundering regulations etc). So that it is very much decidable, even if not how much he owns, but how much he is spending and when these particular Bitcoins were created.
  - dunkelheit 7y ago
    Agreed, but this is something that I suppose will be determined in the future proceedings. So it is incorrect to say "Wright is ordered to hand over $5bn". To be fair, the headline states "up to $5bn" which is technically correct but still misleading because this "up to" part is not something that one notices immediately :)
  - tomglynch 7y ago
    In 2015 the Australian Tax Office searched Craig Wright's home due to possible tax evasion [1]. I'm not sure of the outcome though. [1] https://www.theguardian.com/technology/2015/dec/09/bitcoin-founder-craig-wrights-home-raided-by-australian-police https://www.theguardian.com/technology/2015/dec/09/bitcoin-f...
zelly 7y ago
Forget whether he actually has any bitcoin—there's no way he (or anyone else) would just hand over 500 000 coins just because some local judge said so. That's the whole point of bitcoin: It can't be confiscated. 500k BTC is enough to buy many lifetimes of freedom somewhere on the planet, even if you are wanted dead or alive in a first world country.
- close04 7y ago
  > It can't be confiscated It can't be confiscated if you manage to keep it completely hidden since the second it was mined... just like any other currency. In some ways Bitcoin is a lot more traceable than regular money, which can change hands as cash repeatedly with no traceability. If a court asks you to hand over something and you refuse you might as well spend time in prison until you have a change of heart. You can be compelled to produce the wallet and since transactions are traceable it's possible to calculate how much BTC was mined. Unless the BTC was mined into an obscure wallet that can't be traced back to this guy there's no easy (any?) way to hide how much he mined. Because this isn't about how much BTC the guy controls now (he could just transfer it all and claim there's none left) but how much was mined.
  - im3w1l 7y ago
    Nah, even if you know someone controls the coins you can't confiscate them. You can put the person in jail, you can torture them - sure. But until they spit out the key you can't take the coins you know they have.
    - jtbayly 7y ago
      Right, but that's the whole point. You don't get to just live on the lam because you are rich. You have to actually pull it off. If you wait until they throw you in jail for contempt of court, it's too late. At that point your choices are comply or rot in jail. You can say that's a special feature of Bitcoin, but it isn't. It's the same with gold bullion or cash that you've hidden.
      - 7y ago
timwaagh 7y ago
It seems like the heirs of the other guy are finding legal ways to rob an insane person. It's gross the judge has not apparantly even considered this. Wright is a pathological liar. He makes stuff up constantly to get attention. Although this is a huge flaw, it's unreasonable to allow this to create facts for some other party that weren't proven in the normal way, ie a written contract.
- Vespasian 7y ago
  The legal presumptions is that adult persons are able to stand in court and tell the truth. Declaring someone insane (is this even possible in civil cases?) is intentionally hard and must not be used to protect notorious liars. It's not the plaintiffs fault that Wright sticks to these highly unlikely and susceptible claims. If he is unwilling (because he fears possible sanctions) to come straight, it is own doing. Maybe he got caught in his own web of lies (an investigation by the Australian tax is mentioned in the order) and sees no way to step back. Maybe he fears the shame of being exposed. Who knows. I'm sure there is ample legal precedence to establish partnerships and shares in common property in situations without a formal agreement.
  - SomeOldThrow 7y ago
    Able to tell the truth, but not will. Courts still need to exercise judgement in evaluating claims.
    - Vespasian 7y ago
      The comment I replied to complained that the court did not consider that Wright is a "pathological liar" who constantly seeks attention. The order makes it clear that the court did consider this... against Wright. The Judge writes "During his testimony, Dr. Wright’s demeanor did not impress me as someone who was telling the truth. When it was favorable to him, Dr. Wright appeared to have an excellent memory and a scrupulous attention to detail. Otherwise, Dr. Wright was belligerent and evasive." That does not sound like someone unable to understand what he is saying.
    - 7y ago
ericb 7y ago
So, what are the possible outcomes now? He does not have the bitcoin, so what can he do? - Flee to another country? - Admit he's not Satoshi? - Claim the trust "malfunctioned"? - Appeal? Do these ultimately boil down to flee the country, or get jailed for contempt?
- Taniwha 7y ago
  or for perjury

91 points by gcoleman 7y ago

Seems it was proven he doesn't own those bitcoins, so he's meant to be handing over half of nothing, which is still nothing. Edit: My statement is incorrect. The amount of bitcoins Craig Wright has access to was not determined in the case, but potentially could be none.

FDSGSG 7y ago
How could you possibly prove that he doesn't own those bitcoins? You can prove control, but not lack of ownership unless you just burn the coins.
- sp332 7y ago
  Well, he has been claiming to own them. So the court ordered him to hand over half. I guess he could now try to convince the court that he doesn't own them.
  - steve_taylor 7y ago
    He failed to prove that he’s the inventor of Bitcoin. That doesn’t prove that he isn’t.
    - letstrynvm 7y ago
      If he was though, it'd have various implications such as it not being difficult to prove he had access to his own private keys. I can imagine you might be the guy and not want to prove it, or it to be known. But actively claiming to be the guy and not proving it indisputibly when you could... what'd be the point?
    - andirk 7y ago
      Besides having private keys to early wallets, my #1 reason to not believe him is his arrogance and loving attention. The Nakamoto(s) that wrote the white paper and spoke on forums about it was/were very anonymous and privacy-obsessed.
- dunkelheit 7y ago
  Wright tried to prove that he doesn't control the bitcoins he mined prior to 2013 due to blind trusts, secret sharing schemes and various other excuses. The court ruled that this story is hogwash.
  - DagAgren 7y ago
    The actual situation is this: Wright does not control those bitcoins, because he is not Satoshi Nakamoto, just a conman. He tried to explain the fact that he can't control them with the nonsense story about blind trusts, which the court soundly rejected for being a very obvious lie. The court never decided on whether or not he was Satoshi Nakamoto, as both parties are happy to proceed on the assumption that he is.
    - crtasm 7y ago
      Expanding on that, from TFA: "Reinhart said at the start of his ruling the court “is not required to decide, and does not decide” whether Wright is Nakamoto, and the court was not required to decide and did not decide how much bitcoin Wright controls today."
  - Vespasian 7y ago
    Money quote: "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. Dr. Wright’s story not only was not supported by other evidence in the record, it defies common sense and real-life experience." The Judge goes on to dismantle Wrights claims. He does not believe one bit of this fairy tail.
Nursie 7y ago
He claims to have them, but not have access to them, as part of a team who invented BTC. This court case awards half of his alleged holdings to the beneficiaries of the estate of his alleged partner. His ownership of the coins or the validity of his claim to be Satoshi never came up in this case AFAICT...

uoylj 7y ago

Wizsec commentary: https://blog.wizsec.jp/2019/08/kleiman-v-wright-part-5.html https://blog.wizsec.jp/2019/08/kleiman-v-wright-part-5.html Full court ruling: https://www.courtlistener.com/recap/gov.uscourts.flsd.521536/gov.uscourts.flsd.521536.277.0.pdf https://www.courtlistener.com/recap/gov.uscourts.flsd.521536...

d33 7y ago

This is absurd on so many levels. For example, it's pretty obvious that Bitcoin cannot be valued based on its exchange price in such huge quantities - if any party decided to sell $5bn worth of BTC, the price would obviously go down dramatically at this point. What's the logic behind this order?

9nGQluzmnq3M 7y ago
There are indeed many absurd things about this case, but that's not one of them: the value of anything will collapse if you try to sell a significant fraction of the world's total supply at once.
- sk5t 7y ago
  "I'm sorry, your honor, the laws of supply and demand make it unpalatable to comply with the court's order."
  - 9nGQluzmnq3M 7y ago
    As noted elsewhere, the court is demanding that Wright hand over half the bitcoins, not $5B in USD.
    - sk5t 7y ago
      I agree, although this is not the point to which your original post, and my concurring post, respond. Had the court ordered liquidation--of bitcoin, hogs, apartment blocks, whatever--it seems unlikely that market volatility would stay the court's hand. (Again, we agree about this.)
throwamay1241 7y ago
I see you're new to Australian media reporting standards, or lack thereof =)
- whyenot 7y ago

dunkelheit 7y ago

(IANAL) The headline is misleading. From the court order: "the Court deems the following facts to be established for purposes of this action: (1) Dr. Wright and David Kleiman entered into a 50/50 partnership to develop Bitcoin intellectual property and to mine bitcoin; (2) any Bitcoin-related intellectual property developed by Dr. Wright prior to David Kleiman’s death was property of the partnership, (3) all bitcoin mined by Dr. Wright prior to David Kleiman’s death (“the partnership’s bitcoin”) was property of the partnership when mined; and (4) Plaintiffs presently retain an ownership interest in the partnership’s bitcoin, and any assets traceable to them". Also from the order (and quoted in the article): "The Court also is not required to decide, and does not decide,how much bitcoin, if any, Dr. Wright controls today. For purposes of this proceeding, 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." In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn.

viach 7y ago
> In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn. If Wright is in legal field, I suppose he is in some way forced to make his Bitcoin sell orders public (taxes, anti-laundering regulations etc). So that it is very much decidable, even if not how much he owns, but how much he is spending and when these particular Bitcoins were created.
- dunkelheit 7y ago
  Agreed, but this is something that I suppose will be determined in the future proceedings. So it is incorrect to say "Wright is ordered to hand over $5bn". To be fair, the headline states "up to $5bn" which is technically correct but still misleading because this "up to" part is not something that one notices immediately :)
- tomglynch 7y ago
  In 2015 the Australian Tax Office searched Craig Wright's home due to possible tax evasion [1]. I'm not sure of the outcome though. [1] https://www.theguardian.com/technology/2015/dec/09/bitcoin-founder-craig-wrights-home-raided-by-australian-police https://www.theguardian.com/technology/2015/dec/09/bitcoin-f...

zelly 7y ago

Forget whether he actually has any bitcoin—there's no way he (or anyone else) would just hand over 500 000 coins just because some local judge said so. That's the whole point of bitcoin: It can't be confiscated. 500k BTC is enough to buy many lifetimes of freedom somewhere on the planet, even if you are wanted dead or alive in a first world country.

close04 7y ago
> It can't be confiscated It can't be confiscated if you manage to keep it completely hidden since the second it was mined... just like any other currency. In some ways Bitcoin is a lot more traceable than regular money, which can change hands as cash repeatedly with no traceability. If a court asks you to hand over something and you refuse you might as well spend time in prison until you have a change of heart. You can be compelled to produce the wallet and since transactions are traceable it's possible to calculate how much BTC was mined. Unless the BTC was mined into an obscure wallet that can't be traced back to this guy there's no easy (any?) way to hide how much he mined. Because this isn't about how much BTC the guy controls now (he could just transfer it all and claim there's none left) but how much was mined.
- im3w1l 7y ago
  Nah, even if you know someone controls the coins you can't confiscate them. You can put the person in jail, you can torture them - sure. But until they spit out the key you can't take the coins you know they have.
  - jtbayly 7y ago
    Right, but that's the whole point. You don't get to just live on the lam because you are rich. You have to actually pull it off. If you wait until they throw you in jail for contempt of court, it's too late. At that point your choices are comply or rot in jail. You can say that's a special feature of Bitcoin, but it isn't. It's the same with gold bullion or cash that you've hidden.
    - 7y ago

timwaagh 7y ago

It seems like the heirs of the other guy are finding legal ways to rob an insane person. It's gross the judge has not apparantly even considered this. Wright is a pathological liar. He makes stuff up constantly to get attention. Although this is a huge flaw, it's unreasonable to allow this to create facts for some other party that weren't proven in the normal way, ie a written contract.

Vespasian 7y ago
The legal presumptions is that adult persons are able to stand in court and tell the truth. Declaring someone insane (is this even possible in civil cases?) is intentionally hard and must not be used to protect notorious liars. It's not the plaintiffs fault that Wright sticks to these highly unlikely and susceptible claims. If he is unwilling (because he fears possible sanctions) to come straight, it is own doing. Maybe he got caught in his own web of lies (an investigation by the Australian tax is mentioned in the order) and sees no way to step back. Maybe he fears the shame of being exposed. Who knows. I'm sure there is ample legal precedence to establish partnerships and shares in common property in situations without a formal agreement.
- SomeOldThrow 7y ago
  Able to tell the truth, but not will. Courts still need to exercise judgement in evaluating claims.
  - Vespasian 7y ago
    The comment I replied to complained that the court did not consider that Wright is a "pathological liar" who constantly seeks attention. The order makes it clear that the court did consider this... against Wright. The Judge writes "During his testimony, Dr. Wright’s demeanor did not impress me as someone who was telling the truth. When it was favorable to him, Dr. Wright appeared to have an excellent memory and a scrupulous attention to detail. Otherwise, Dr. Wright was belligerent and evasive." That does not sound like someone unable to understand what he is saying.
  - 7y ago

ericb 7y ago

So, what are the possible outcomes now? He does not have the bitcoin, so what can he do? - Flee to another country? - Admit he's not Satoshi? - Claim the trust "malfunctioned"? - Appeal? Do these ultimately boil down to flee the country, or get jailed for contempt?

Taniwha 7y ago
or for perjury