Craig Wright going to trial

Craig Wright is going to trial

After two years, the preliminaries in Ira Kleiman’s $10 billion lawsuit against the man who claims to be Satoshi Nakamoto are over and the argument is heading to a jury

Ira Kleiman will get his day in court.

In an eye-wateringly long, 93-page ruling, Federal Judge Beth Bloom threw out self-proclaimed bitcoin creator Craig Wright’s last attempt to wriggle out of a lawsuit seeking half of Satoshi Nakamoto’s $10 billion in bitcoins.

Wright, chief scientist of nChain and genuinely father of the Bitcoin SV cryptocurrency, has long claimed to be Nakamoto, which would give him possession of the 1.1 million BTC (technically worth about $11.5 billion at press time, but it was $10 billion when the case was filed, and the value has floated around that number).

While virtually no one in the cryptocurrency industry believes his claim, the estate of Wright’s late partner at the time those bitcoins were mined in the project’s early days, Dave Kleiman, does and wants half. Ira Kleiman is suing in the federal court for the Southern District of Florida for 5.5 million bitcoins and half of the Bitcoin intellectual property. 

While the pre-trial discovery period has dragged on for two years—due largely to Wright’s maneuvers, bombshells, and what Judge Bloom has flat-out called lies—the Sept. 21 ruling on the motion for summary judgement was the last step before trial.

“This was a major loss by Wright in a detailed and well-supported opinion,” attorney Stephen Palley of Anderson Kill tweeted, adding elsewhere in the thread, “Most of Wright’s affirmative defenses are gone. No evidence to support them, or waived.”

Palley, who has been following the case for years, explained summary judgement: “If you can show that the ‘material facts are not dispute and that as a consequence you are entitled to judgment in your favor as a matter of law, winner winner chicken dinner, and you can get out of the case in full or in part. that’s what wright asked for here.”

As for the Wright’s motion, he added: “A lot of facts follow, very much in the weeds, seems like the Court rejects pretty much everything wright argues out of frigging hand.”

Tulip Trusts and a bonded courier

The case is incredibly complex, due in no little part to Wright’s penchant for bringing up new facts.

But it comes down to this: Wright claimed that the private keys for the 1.1 million bitcoins were held in the Tulip Trust document, and that the trust is locked with a multi-key encryption tool called a Shamir Secret Sharing Algorithm. 

Wright told the court that he did not have the all the keys to unlock the trust, which he claimed would be returned to him on Jan. 1, 2020,  by a “bonded courier.”

Along the way another two Tulip Trusts appeared. Wright also nearly lost the case when the magistrate judge assisting Judge Bloom in the discovery phase of the trial made a summary judgement against Wright due to his courtroom and document production shenanigans—which included threats to be jailed for contempt. Wright was ordered to turn over 550,000 bitcoins.

Judge Bloom overturned that order and the trial continued.

The bonded courier did eventually appear—Wright said—but the private keys to Satoshi’s fortune have not yet been unlocked to prove Wright’s claim to be Nakamoto. 

With today’s final ruling, Judge Bloom has declared that Ira Kleiman will finally get his day in court before a jury.

Can Wright defeat him? 

Palley’s opinion: “I wouldn’t bet on it.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.