Craig Wright Tulip Trust III Australian jail
Bitcoin,  People

Craig Wright: Turning over documents could land me in jail

The self-proclaimed bitcoin creator told a U.S. judge that following her orders in the lawsuit seeking half of Satoshi Nakamoto’s $10 billion in bitcoin would violate the law in his native Australia

Craig Wright told a U.S. judge yesterday that he could be jailed in Australia for following her orders.

Just a week ago Judge Beth Bloom gave Wright until Valentine’s Day to redact and hand over anything privileged in the “Tulip Trust III” document, which Wright claims contain the keys to unlocking Satoshi Nakamoto’s 1.1 million bitcoins. 

The nChain chief scientist is being sued for half of those bitcoins and half of the intellectual property of the bitcoin protocol by Ira Kleiman, the adopted brother of Wright’s deceased partner, Dave Kleiman. Wright, who claims to be Bitcoin’s creator, has long said that he does not have access to the coins, because they are held in various encrypted trusts. Most of the cryptocurrency community believes he does not have access to the coins because he is not Satoshi Nakamoto.

In February, Wright argued that because the long-awaited “bonder courier” that delivered the Tulip Trust III documents to him in January was an attorney, the contents were protected by attorney-client privilege. Federal Judge Beth Bloom didn’t buy that argument, and ordered him to turn it over, along with a vast cache of related documents. 

Judge Bloom gave him two weeks to redact them.

In 54-page reply to that order in the ongoing $10 billion lawsuit, Wright claimed this would be a “gross violation” of Australia’s strict attorney-client privilege laws. As his attorneys describe it, the Australian government technically owns the privilege after a company is dissolved. And they won’t budge. 

Craig Wright jail Australia if wave attorney-client privilege

“A corporation’s privilege is not extinguished by its dissolution, and upon dissolution, the right to waive a corporation’s privilege passes on to the Australian Securities and Investment Commission,” Wright’s lawyers said. “It is ASIC’s stated policy not to waive that privilege.”

We want it all

It’s not just the Tulip Trust III documents. The Kleimans are asking the courts to compel Wright to give over any documents that would give them information about the trusts. Wright has already turned over a staggering “198,221 non-privileged documents.”

Wright argues that turning over any more will be a violation of Australian law—which could mean jail time under the Australian version of contempt of court.

Last week, Kleiman attorneys Velvel Freedman and Kyle Roche took a newly aggressive approach against Wright. If he has a document in his possession, they want him to turn it over to the courts. If that document belongs to a corporation or entity that has dissolved, they want him to turn it over to the courts. If that document belongs to a company that exists, but that he does not control, they want him to turn it over to the courts.

The new strategy by Kleiman’s attorneys was to remove Wright’s ability to hide documents under attorney-client privilege. Wright appears to have protected a large sum of bitcoin and patents under a number of shell companies that he does not control. Team Kleiman wants to capitalize on this lack of control. 

Their argument was, basically: no control, no privilege.

Australia says no

After refuting the no-control, no-privilege argument under Florida law, Wright’s legal team argued that Wright couldn’t give up Australian attorney-client privilege even if he wanted to. 

They filed a lengthy argument and sworn declaration from an Australian barrister claiming that Australian law not only protects his documents, but that a failure to protect them would be a violation of the law. Indeed, because Wright was in control of these corporations when they were dissolved, all of his remaining records are still protected under Australian law.

“The documents are undisputedly privileged, and Dr. Wright is not in the position to waive the privilege,” said an Australian attorney with the extremely-Goth name Gordon Grieve. “Ordering Dr. Wright to produce the privileged documents would require Dr. Wright to violate Australian law.”

Grieve, who has more than 35 years of legal experience, stated in his declaration that “Australian law deems attorney-client communications privileged from the moment of the communication, there is no need to ‘assert’ or ‘claim’ the privilege, and the privilege survives a corporation’s dissolution. For this reason, plaintiffs’ request puts Dr. Wright in the untenable position of having to violate Australian law.”

His argument was, basically: if Wright has a document, it was privileged at the time he received, stored, or created it. 

Starting and hiding shell companies may look shady. But Wright’s lawyers argue that the creation of all of these entities does require legal documentation and anyone who discusses these matters with a lawyer is entitled to certain privileges.

Grieve ended his declaration by asking the U.S. court to preserve and respect the sovereignty of the courts in Australia and the U.K.

“This Court should heed the doctrine of judicial comity and not require Dr. Wright to produce the privileged documents.”

Completely unreasonable

Wright also argues that even trying to turn over these documents legally would be too burdensome. Because of the way these documents overlap in privilege and solvency, they would require multiple legal firms to sign off on the documents being released, Grieve said.

Even if Wright agreed to wave Australian attorney-client privilege, he would have “to contact all the parties that would have the right to assert privilege over the documents,” the filing states. “This means that Dr. Wright would have to reach out to the representatives of 17 foreign corporations and at least 65 individual attorneys, many of whom are located in Australia or the U.K.”

They added: “Coordinating such a mass scale document review is simply not proportionate to the needs of the case.” 

That’s especially true given that Kleiman’s lawyers “have made absolutely no showing why they need the privileged documents beyond the 198,221 non-privileged documents that Dr. Wright has already produced, and considering that many of the privileged documents are not relevant to this lawsuit,” Wright’s attorneys added.

For example, the Kleimans have requested all document that come up when you search Wright’s emails and files for “David or Dave or Davids or Daves or dave_kleiman or davekleiman” and “partner* or draft or Wright or code or agree.” 

All five of these terms did appear in one document. But the “David” it referred to was the ex-husband of Ramona Watts, Wright’s wife.

Final analysis

This whole argument involves a lot of weighty and cumbersome international law. It’s a mess inside of a mess. But the only question is: Did Wright have a partnership with Dave Kleiman and can Kleiman’s estate prove that?

Perhaps somewhere a document can prove this either way. This case is so crazy that one could imagine a document in a lawyer’s office in a safe in Australia that says, “I, Dave Kleiman, did not help invent bitcoin.” I’d say that’s far-fetched, but every extreme option in this case that can be used has been used.

Unless the judge orders Wright to turn over a document which he currently possesses: it looks like we won’t find out more about the Tulip Trust III and the 1.1 million bitcoins anytime soon.

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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.