Craig Wright’s inability to give straight answers in court is going to cost him more than $650,000.
The nChain founder is being sued by the brother of his late partner, Dave Kleiman, for half of the Tulip Trust. That’s a cache of more than one million bitcoins mined near the very beginning of the Bitcoin blockchain by—most industry insiders believe—its creator, the pseudonymous Satoshi Nakamoto.
Wright has claimed to be Nakamoto, which would give him access to that fortune.
That $658,581.78 is not for the whole cost of the lawsuit brought by Kleiman’s brother and heir, Ira. It’s just for the time Kleiman’s lawyers spent trying to pry a list of the bitcoin addresses Wright owned before 2014 out of him. And, to investigate the many conflicting answers he gave on the stand. Notably, Wright has given several different explanations of encryption that prevents him from accessing the Tulip Trust.
The judge was not amused, and ordered the magistrate judge overseeing the hearings to make Wright to pay Kleiman’s attorney fees.
“Dr. Wright’s demeanor did not impress me as someone who was telling the truth,” U.S. Magistrate Judge Bruce Reinhart wrote in the August 27 ruling that led to the sanction.
“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,” he said. “Dr. Wright’s story not only was not supported by other evidence in the record, it defies common sense and real-life experience.”
Kleiman’s lawyers are billing Wright for the time they spent working on that part of the case, sometimes at rates that top out at well over $1,000 an hour. All just to find out what happened to the early bitcoin fortune, worth about $7.4 billion at press time.
All this wasted a lot of time, both for the court and for Kleiman’s two law firms, Boise Schiller and Roche Freedman, Judge Reinhart noted.
If those law firm’s names sound familiar, there’s a reason. Roche Freedman recently filed a $1.4 trillion (yes, trillion) lawsuit against Tether.
Boise Schiller has taken a lot of high profile, controversial clients lately. Earlier this year, Bloomberg’s Big Law Business pointed to “David Boies signing off on a contract that allowed private investigators to help disgraced movie mogul Harvey Weinstein fend off some #MeToo allegations.”
The privilege of working with attorney Velvel Freedman doesn’t come cheap. For example, he spent 19 hours on August 25 to “[p]repare for closing arguments.” For this, he billed $17,100.00. That’s $900 per hour.
Velvel’s cheaper to work with, though. Andrew Brenner billed $8,820.00 the next day for 8.4 hours of prep before they went in to see the judge. That’s $1,050 an hour. Luckily, Kyle Roche logged about the same amount of hours for a measly $690 per hour.
Those the itemized bills were submitted on August 26, 2019. If there’s another round, we’’ll probably get to see how much it cost the law firms to try (and fail) to subpoena me for years of transcripts of interviews with Wright while I was on vacation on August 27, 2019.
Behind the pseudonym
The fortune would be news to Dave Kleiman, who died broke. On Thursday Modern Consensus revealed that he was even denied a small payday loan on the day he died.
It’s worth pointing out that Wright could have paid far less. Ira Kleiman originally asked for only $6 million, according to leaked emails.
The mythical Satoshi Nakamoto of the cryptocurrency world’s imagination is a tech hacker who wants to bring freedom to the world.
That image doesn’t match up with serial entrepreneur Craig Wright, a straight-laced but aggressive Australian businessman with a background in law, now living in London.
Wright’s claim to be Nakamoto first surfaced in 2015. Documents leaked to WIRED and Gizmodo claimed that Wright and Kleiman created the first bitcoin server.
Wright says that the suit forced him to come out as Satoshi Nakamoto. Once that happened, he came out aggressively, suing people who publicly denied his claim.
In an exclusive interview with Modern Consensus (which you’ll be able to read next week), I asked Wright why he was fighting Ira Kleiman’s suit.
“Whether you say it or not, I believe in the rule of law,” he said. “I believe you go through a lot of sh*t in court cases but eventually everything gets sorted. Eventually it becomes a media spectacle in this world, which it shouldn’t be.”