Craig Wright reading sued billions in bitcoin
Cryptocurrencies,  People

Judge to Craig Wright: Put up or shut up

Self-proclaimed bitcoin creator given until Feb. 3 to prove a ‘mysterious bonded courier’ is delivering the keys to $9 billion in bitcoin in ‘Tulip Trust I-III’

Craig Wright has just 23 days left to prove his claim he’s really Satoshi Nakamoto, the creator of Bitcoin and founder of the cryptocurrency revolution.

Wright is being sued by the adopted brother of his late partner, Dave Kleiman, for half of the 1,100,111 bitcoins mined at the very beginning of the Bitcoin project, presumably by Satoshi Nakamoto. That’s worth $8.96 billion at today’s prices, and the court has already found in Ira Kleiman’s favor even though the trial has not yet begun.

Wright’s widely disbelieved claim is that the bitcoins are held in a Tulip Trust—actually three Tulip Trusts, he’s revealed over time in court—and that the passcodes will be delivered to him via bonded courier in January 2020. 

Federal District Judge Beth Bloom: Show me the bitcoin, Craig! (via Wikipedia).

Jan. 1 was the delivery date Wright originally set, but that apparently passed without action.

In a private message on Jan. 5, Modern Consensus asked Wright whether the courier had arrived on the first of the month. “You will have to wait for my deposition,” he responded.

In a scorching ruling on Friday, District Judge Beth Bloom of the Federal District Court for Southern Florida gave Wright until Monday, Feb. 3 to prove that the “mysterious ‘bonded courier’” he said will deliver the keys to the missing bitcoin fortune actually exists. That is the first day the court will be open after Wright’s claimed deadline of Jan. 31 arrives. 

Judges out of patience

Judge Bloom appears to side with Binance cryptocurrency exchange CEO Changpeng “CZ” Zhao,What Bitcoin Did” podcaster Peter McCormack, Ethereum creator Vitalik Buterin, and the many thousands of others in the bitcoin industry who don’t believe Wright is Nakamoto or has those billions in bitcoins. She certainly doesn’t believe a courier is coming.

“Given the Defendant’s many inconsistencies and misstatements, the Court questions whether it is remotely plausible that the mysterious ‘bonded courier’ is going to arrive, yet alone that he will arrive in January 2020 as the Defendant now contends,” Judge Bloom wrote in the Jan. 10 order. “However, given that the Defendant maintains that he should at least be afforded this opportunity, the Court will indulge him this much.”

But, that is the end of the court’s indulgence, Judge Bloom made clear.

“The Court first notes the obvious novelty of this argument,” she said in the order. “Indeed, the Defendant testified that the now deceased David Kleiman was the only person he is aware of who knew who else controlled the Shamir key slices,” she said, referring to the multi-key encryption scheme Wright claims controls access to the Tulip Trusts.

“In the event this occurs, and further if the Defendant produces his list of Bitcoin Holdings as ordered by the Magistrate Judge, then this Court will not impose any additional sanctions,” Bloom said. 

She added, ominously, “In the event the bonded courier does not arrive, and the Plaintiffs are not given access to this information, which the Court has already found directly relevant to their claims, the Court finds additional sanctions would be warranted.”

No more lies

The order lists eight separate instances in which the court gave Craig Wright the chance to clear the record and turn over information about what bitcoin holdings he possessed before the end of 2013. Each subsequent attempt delayed proceedings and required motions to compel and new rounds of discovery. 

Judge Bloom’s comments came at the end of a blistering, 23-page barn-burner of an order. The judge was not kind to Wright. That is because Judge Bloom needed the first 21 pages to show the pathology of Craig Wright’s half-answers and attempts to evade what could have been a straight-forward discovery process.

Magistrate Judge Reinhart has made his opinion of Wright’s character crystal clear. In her order, Judge Bloom said she “agrees with his credibility findings relating to” Wright. 

“[T]he sole evidence put forward to establish the Defendant’s claim of impossibility, his own testimony, was found not to be credible by Judge Reinhart” Judge Bloom said. 

She then quoted Magistrate Judge Reinhart: “I completely reject Dr. Wright’s testimony about the alleged Tulip Trust, the alleged encrypted file, and his inability to identify his bitcoin holdings . . . During his testimony, Dr. Wright’s demeanor did not impress me as someone who was telling the truth.”

Wright, Judge Bloom added, “was evasive, refused to give and interpret words in their very basic meanings, was combative, and became defensive when confronted with previous inconsistencies.”

I will comply

If—and by now it’s a big, BIG if—Wright can produce proof on Feb. 3 that a bonded courier does in fact exist and did in fact arrive with the key codes to a fortune—Wright told Modern Consensus that he would comply with an order to turn over more than half a million bitcoins to Ira Klein.

Speaking to Modern Consensus by phone moments after Magistrate Judge Bruce Reinhart, who is overseeing depositions in the case, issued that order in August, Wright said he would pay up. If he can get into the Tulip Trust.

Whether or not the “mysterious bonded courier” shows up, Wright will pay. He has already been ordered to pay Ira Kleiman’s court costs, which late November had reached $650,000. And the court could well find that he owes Ira Kleiman the cost of those bitcoins. That would likely see Wright in bankruptcy court. It could also put Ira Kleiman owning much of the Bitcoin Satoshi Version (BSV) cryptocurrency that Wright forked off the original Bitcoin blockchain. 

And if by some chance the courier actually exists and arrives, the world will learn a lot more about the beginnings of Bitcoin, and the cryptocurrency industry will eat a great deal of crow.

Either way, Wright has no more second chances. If the courier doesn’t come, he’s done as Satoshi Nakamoto.

Updated caption at 1:10 pm on Jan. 14, 2020

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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.