Jury rejects bitcoin partnership as crypto mystery continues

A Florida civil lawsuit has not resolved longstanding questions about the cryptocurrency’s creation.

‘This has been a remarkably good outcome and I feel completely vindicated,’ said Craig Wright, above, an Australian living in the UK, after the Florida case ended. Picture: Kristina Uffe

A Florida jury rejected claims that Craig Wright and David Kleiman formed a partnership to launch bitcoin, ending a high-profile case that revolved around the identity of the digital currency’s anonymous creator Satoshi Nakamoto and the disposition of a multibillion-dollar fortune.

The civil suit, filed by the family of Mr Kleiman, now deceased, alleged that he and Mr Wright formed a business partnership, called W&K Information Defense Research.

As part of that partnership, they together created and launched bitcoin in 2008 and 2009, using the pseudonym Satoshi Nakamoto, the suit alleged.

After Mr Kleiman’s death in 2013, according to the suit, Mr Wright covered up Mr Kleiman’s involvement. The suit sought restitution that could have totalled tens of billions and forced Mr Wright to sell some of the fortune in bitcoin assumed to be held by Nakamoto.

Had it occurred, that would have settled the question of whether or not Mr Wright – who has for years claimed he created bitcoin – was indeed involved.

The jury dismissed nine of 10 claims, including unjust enrichment, fraud, misappropriation and breach of partnership duties, against Mr Wright, an Australian living in the UK. The plaintiffs won on one complaint, arguing that Mr Wright converted for his own use bitcoins that belonged to the partnership. The jury awarded the estate of Mr Kleiman, who was a Florida resident, $US100m on that count.

“This has been a remarkably good outcome and I feel completely vindicated,” Mr Wright said outside the courthouse after the case concluded.

The case was narrowly about the nature of a short-lived business partnership. It was more broadly about bitcoin, which Mr Wright has claimed since 2016 he launched using the pseudonym Satoshi Nakamoto.

The verdict makes it less likely that the mystery surrounding Nakamoto’s true identity will be resolved any time soon. In a statement, plaintiff’s attorneys Vel Freedman and Kyle Roche said they were “immensely gratified” with the $US100m award, which reflected that “Craig Wright wrongfully took bitcoin-related assets from W&K”.

The verdict, however, makes it less likely that Mr Wright will be forced to prove his claims of having created bitcoin by selling any of the roughly one million bitcoins believed to have been “mined” in 2009 by Nakamoto.

At current prices, those bitcoins are worth roughly $US50bn. Proving ownership of those bitcoins is something that most likely only the real Nakamoto could do and is the most important part of uncovering his true identity.

Mr Wright has claimed them, but has never sold them or otherwise moved them. Mr Wright’s legal team has maintained that he will prove his ownership after the trial, and then direct them to “charitable use”.

Mr Wright claimed the partnership was informal and didn’t involve the creation of bitcoin, which he says he developed on his own, only later receiving help from Mr Kleiman and others.

Mr Wright’s claims have for years been broadly rejected by the bitcoin community, many members of which were unlikely to be swayed by the case’s outcome either way.

Mr Wright went public in 2016 in an orchestrated media campaign. He met with early bitcoin pioneers, gave interviews to a handful of media outlets, and published a blog filled with his writings on cryptography and bitcoin.

Within days, most bitcoiners dissected and rejected his evidence, and he backed off. He later renewed the claims.

Mr Wright, who is chief science officer at UK fintech firm nChain, said that he planned to remain involved in cryptocurrencies and digital cash.

The Wall Street Journal