A hearing in the Kleiman v. Wright case concluded Monday with the U.S. District Court for the Southern District of Florida rejecting Craig S. Wright’s testimony. The judge determined that “Satoshi Nakamoto” is a partnership of three people, but awarded half of its bitcoin holdings to the Kleiman estate. Craig Wright told Modern Consensus he “has no choice but to hand over $5 billion in BTC.”
Because this transfer is happening as an estate transfer valued at $5 billion, Ira Kleiman may have to dump $2 billion in BTC.
The court also awarded Kleiman’s estate with the intellectual property associated with the Bitcoin software, but none associated with Bitcoin Cash or Craig Wright’s back-to-basics Bitcoin Satoshi Vision. According to the suit, Wright and Kleiman mined these million bitcoins between 2009 and 2011, which were said to be stored in a trust called the “Tulip Trust.”
Modern Consensus spoke to Wright by telephone today just after he left the Florida courtroom.
MODERN CONSENSUS: How are ya doing?
CRAIG WRIGHT: Been better.
I’ll just ask, what does today’s ruling actually mean for Bitcoin and crypto?
The judge won’t rule on whether I’m Satoshi. But the partnership is. So when Dave Kleiman passed, the partnership transferred to Ira.
Will this affect BSV?
BSV, it won’t. But the judge ordered me to send just under 500,000 BTC over to Ira. Let’s see what it does to the market. I wouldn’t have tanked the market. I’m nice.
You could flood the market with $5 billion in BTC today, but I’m guessing you won’t. You have too much in progress on-chain. But what if the chain collapses? Presumably the market could tank to bad that whoever inherits his BTC would get substantially less.
I’m just not going to do that.
I know people think you’re a miserable prick. But you once told me that you and your wife had decided that this $10 billion fortune was too much. You said you worried about what it would do for your kids.
It’s fucking scary. Now the kids are going to know that we have the other $5 billion. And it really sucks. Imagine that (laughs). I had planned to live a long time and hopefully they wouldn’t know until they were older and we were gone. It could affect their whole lives.
Not to get you in hot water with the judge, but it doesn’t sound like anyone thought through what this would really mean to just hand over the keys to a huge industry.
No one seems to get that I’ve made 800 patents in IP and more are coming. Just on that I could have raised a lot of money. I’m sorry, BTC, but that might be a problem. They might have to convince Ira not to dump it. I can’t convince him not to dump it. Ira has to do what Ira has to do. And it wouldn’t have been me. And I don’t need it. He does.
I mean, I get it. You make money creating things for nChain, so you don’t need to dump any BTC from the Tulip Trust. But they can’t force Ira to sell. Can they?
He doesn’t actually need it but he wants it. Everyone might want to start praying, because I complied with courts and that might get scary really, really quickly. The courts ruled that Ira inherited the $5 billion. Now he has to pay estate tax on that if he wants it.
Whoa! The estate tax is 40%. Unless Ira has $2 billion in cash, he will have to dump 2 million BTC to pay the taxes.
[Editor’s note: Dave Kleiman died on April 26, 2013. At the time, bitcoins traded for roughly $5.10. Thus the amount in question was valued at just under $3 million, well below the $5 million federal estate tax exemption that year.]
Sorry. I’m just running the number. How are you feeling after all this?
I’m fine, we’re going to keep going. But I’ll make sure I keep supporting it. I can’t help.
But how will you actually get the money? We’ve talked over the years and I’ve always tried to respect your privacy. Just because it’s none of my business how much someone else is holding. But now you’ll have to break the Tulip Trust to transfer the coins.
If the court makes an order, I will comply with the order. And the court has made an order. It’s that simple.
So this affects the so-called “Satoshi Blocks” of unmoved bitcoins in the blockchain. The block rewards from when 50 bitcoins were issued for mining. Does that mean blocks that haven’t moved will since 2009 will get transferred?
Not at least, just under half. Because they’ll have to come out of partnership. I spent more money on the project than Dave, so I will rule on that and effectively Ira will get maybe 480,000 BTC.
And again, shouldn’t that include the BTC, BCH, and BSV and every other fork of Bitcoin? All of those had to replicate the original blockchain starting from zero.
According to the judge it’s only from before Dave died, so only BTC. Sorry BTC.
Wow. I’m sorry. This just isn’t the outcome that anybody wanted. I’ve even heard you tell me how you wanted to destroy BTC or BCH because they forked away from your plan. They always seemed to win out before. But this could tank the markets.
Everyone wants to hate on me. This is the result. If you’d left me alone, I would have sat on my fucking money and you wouldn’t have to worry. And the biggest whale ever has to dump because he has to pay tax. It’s not a transfer. Florida has an estate tax. Trust me. This is not an outcome I would have liked. I own a lot of BTC. Dave should have owned 320,000 and I should have had 800,000 and now it’s 50/50. At the end of the day, that’s not a good thing for BTC.
[Editor’s note: Florida eliminated its estate tax after 2005.]
I know you can be a little combative but you never wished ill on the others. Yet this is beyond good and bad.
Trust me. Everyone makes me look like a mean asshole. I might have been a prick, but I was the prick who was withholding. I could have tanked the market anytime in the last 10 years and ran away laughing. I didn’t.
This goes back to the original Bitcoin whitepaper and the problem of the “selfish miner.” Someone could ruin the blockchain, but it would be more profitable to play by the rules and make some money along the way. Dave doesn’t have a choice. He has to sell to get any value. But by selling, he could destroy the whole crypto economy. Where BTC goes, so goes the whole market. And anybody still trying to raise money with an ICO.
Yes. And I tried to tell people and they tried to make me out to be a total prick. I sat on $10 billion and didn’t touch it. And this was happens. When you find a find a gorilla, don’t kick it in the nuts.
Haha. I’m sorry to be laughing. This could be the worst day of your life.
This is not the worst day in my life. My grandfather died, that was worse. This was just money. This is just money. Dave died, that was a worse day for me, because I lost a friend and a partner.
Bitcoin took off while the world fell into recession in 2009. Now we’re facing another one and it could take down the whole market.
I’m the asshole who keeps inventing things that other people need. I’m not the good media personality. You think I’m gonna complain because I only get to keep $6 billion? And I’m the only surviving member of Satoshi? The judge ruled it was a partnership. I’m the asshole Satoshi. And Dave was the nice one. So have a nice day.
[Note: A transcription error in at one point in an earlier version of this story identified Ira Kleiman as Dave Kleiman.]