Craig Wright Tulip Trust III
Bitcoin,  People

Craig Wright: Attorney-client privilege protects delivery by ‘bonded courier’

Federal Judge Beth Bloom: LOL, no.

Craig Wright tried to claim that attorney-client privilege protected him from having to divulge whether the “bonded courier” brought him the keys to Satoshi Nakamoto’s $10 billion bitcoin fortune.

Those keys are supposed to unlock the Tulip Trust—or Trusts, as he has revealed at least three—which Wright said contains the private keys to more than 1.1 million bitcoins mined by the real Nakamoto.

Wright is being sued by the adopted brother of his late partner Dave Kleiman for half of those bitcoins, as well as half of the Bitcoin intellectual property. He has not been a model defendant.

In what they said “continues to demonstrate a pattern of Craig’s abuse of privilege claims,” Ira Kleiman’s attorneys told the court on on Feb. 2 that Wright “has claimed that the bonded courier is an attorney and his communications are privileged.”

Because attorney-client privilege is absolute, if he got away with it, Wright would never have to reveal what, if anything, was in the Tulip Trust documents the courier gave him. 

He did not get away with it.

Judge Bloom calls shenanigans 

On Feb. 4, Federal District Judge Beth Bloom of the southern district of Florida gave him until Valentine’s Day to turn over the information.

Wright has long claimed that the cache of 1,100,111 bitcoins mined at the beginning of the Bitcoin project is locked away behind a complex encryption scheme that could only be opened when a “bonded courier” brought him the necessary key codes. The courier, Wright told two federal judges, was due to arrive on Jan. 1, 2020.

On Jan. 14, Wright told the court the courier had arrived. Three days later, Decrypt reported that one of Wright’s own attorneys said that the courier had not brought Wright the necessary key codes.

Wright has claimed to be Nakamoto for years. That claim is widely—and aggressively—disputed in the cryptocurrency community at large. 

A ‘pattern of abuse’

Complaining that Wright “explicitly manipulates privilege to shield information from disclosure,” Kleiman’s attorneys told federal Magistrate Judge Bruce Reinhart (who is assisting Judge Bloom) that this claim is just the latest in “a pattern of Craig’s abuse of privilege claims.”

That abuse, they said, is a deliberate plan of “obfuscation” by the founder of the Bitcoin Satoshi Version cryptocurrency—also known as Bitcoin SV, or BSV. 

Kleiman’s attorneys added that Wright has created an unnecessary and cumbersome trust system and is wasting the court’s time. 

They claim that Wright is hiding “Tulip Trust III“—the third in a Russian nesting doll series of trusts allegedly containing Nakamoto’s billions—in “non-existent companies.”

He has also argued that the assets in the Tulip Trust are owned by the Wright family trust—a group of which he claims not to be a beneficiary

That in turn means only the Tulip Trustees, and not Wright, can claim privilege, Kleiman’s attorneys added. So it wouldn’t matter if the bonded courier was a lawyer or not. The documents would be the property of the Tulip Trust.

The Wright grind

In the filing, attorneys for the Kleiman family sound downright worn out by Wright’s maneuvers.

“To say that discovery in this case has been challenging would be a dramatic understatement,” wrote attorneys Velvel Freedman, Kyle Roche, and Andrew Brenner. “An adversary who submits false declarations, offers contradictory perjurious testimony under oath, and submits false documents that even his own counsel are forced to disavow, severely hinders the ability to seek the truth. Unfortunately, this pattern of obfuscation is now being continued through sweeping assertions of attorney-client, work-product and (recently) joint defense privileges.”

Wright has claimed attorney-client privilege on more than 11,000 documents, Kleiman’s attorney’s complained to the court. That includes 2,100 documents dumped on them in the last week of January.

”The sheer number of privilege assertions is only part of the problem,” Kleiman’s lawyers told the court in the Feb. 2 filing. “The vague descriptions of what is being withheld makes any meaningful analysis on a document by document basis impossible.” 

Having been buried in vaguely described documents, the lawyers have instead asked Magistrate Judge Bruce Reinhart to make Wright specify who owns each of the 11,000 documents he has said are shielded by privilege.

Given that Reinhart has already called Wright a liar, threatened to hold him in contempt, and ordered him to pay more than $650,000 towards Kleiman’s legal expenses, it seems likely he’ll rule in their favor on Feb. 11.

The sword and the shield

Even more troubling than the vague descriptions, Freedman, Roche, and Brenner said, is “the web of companies [Wright] has used to shield what will likely end up being tens of thousands of documents.”

Wright is claiming privilege for more than a dozen companies “to hide documents while at the same time disavowing any control over those companies when it suits his interest,” Kleiman’s legal team said. He “claims to lack basic information about the companies, or the ability to access the companies’ documents.”

However, Wright has previously argued that when his companies’ were liquidated, the documents ceased to be “his” or “the company’s.”

As a result Kleiman’s attorneys are trying to force Wright to admit that he liquidated the companies whose communications he is trying to hide behind attorney-client privilege. Since those companies don’t exist any more, Kleiman’s legal team has argued, all their records should be turned over, as they can’t hurt a company that has shut down.

Arguing that these companies were set up to protect Wright, they said that all but three were liquidated—and two more are in the process—so those firms can’t protect his assets and documents anymore. Only BSV development firm nChain, where Wright is chief scientist, still exists. It bought most of his patents and assets, Wright has claimed.

Basically, Wright can either claim that he is in control of the companies and can assert privilege, or the companies can do it themselves, Kleiman’s lawyers argued. But he cannot argue that he can protect a document controlled by a company he does not control, they added.

“Any privilege these companies may have once had, does not survive their dissolution,” the Kleiman’s lawyers told the court. “Defendant cannot use these entities as both a sword (assertion of privileges) and a shield (claiming to not be able to access company documents).”

It is not a very straight-forward argument. However, nothing involving Craig Wright, his companies, or his various schemes ever is. 

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Brendan Sullivan is a writer, producer, and author of the memoir Rivington Was Ours: Lady Gaga, the Lower East Side, and the Prime of Our Lives. Disclosure: he owns cryptocurrencies. Follow him on Twitter.