In a recent High Court decision[1], Mr Justice Mellow granted a Worldwide Freezing Order (WFO) against Dr Craig Wright, who claimed to be Satoshi Nakamoto, the person, or one of the group of people, who developed Bitcoin.
Background to the Application
The WFO was made in the context of a libel claim brought by Dr Wright against Peter McCormack, the judgment for which was handed down on 1 August 2022.
Peter McCormack runs a podcast about issues relating to bitcoin and cryptocurrency. He made various ‘publications’ on social media alleging that Dr Wright had fraudulently claimed to be Satoshi Nakamoto. By the end of the trial, Mr Justice Chamberlain held that Dr Wright had established liability in libel.
However, Dr Wright was found to have lied about the facts relating to the issue of harm to his reputation. Taking his dishonest conduct into consideration, he was entitled to only nominal damages of £1.
Further Lies and Forgeries
In a later judgment in separate proceedings[2], Mr Justice Mellor held that Dr Wright was not Satoshi Nakamoto. He explained his reasons in a written judgment handed down on 20 May 2024. More serious still, Mr Justice Mellor held that Dr Wright had lied and forged documents to prove that he was Satoshi Nakamoto.
Mr Justice Mellor said that the claim was “part of the mendacious overall campaign by Dr Wright and his backers to establish Dr Wright as Satoshi Nakamoto and, ultimately, to obtain access to all or part of the large quantity of Bitcoin attributed to Satoshi, worth many billions.”
He concluded that Dr Wright was using the law of defamation to silence anyone who dared to contend that Dr Wright was not Satoshi or to question his claim.
Protecting the Right to Recover Costs
After that judgment was handed down, Mr McCormack applied for a WFO in the sum of £1.548m. His aim was to protect the sums that he says he is entitled to recover from Dr Wright, which relate to the costs of the litigation.
In light of the background to the WFO application, Mr Justice Mellor emphasised the ‘big picture’ in deciding whether or not to grant it. Essentially, Dr Wright’s defamation claim was founded on a lie, and was supported by a series of forged documents. Mr McCormack’s principal defence of truth was correct. But he was forced to abandon that defence due to costs pressure.
Mr Justice Mellor said that “our law would be in a sorry and sad state if a litigant in the position of Mr McCormack is not able to recover his costs of having to fight that type of litigation.”
Reasons for Granting the WFO
One reason for granting the order was that Dr Wright has previously made payments to court to avoid giving disclosure of his assets. The evidence of the assets available to meet various costs orders against him is “extremely shadowy.”
This was part of a list of concerns over Dr Wright’s possible propensity to dissipate his assets.
Another concern was that Dr Wright’s current whereabouts are unknown. He appears to be in a UTC+7 timezone and speculation suggests he is in East Asia.
In previous proceedings it was said that “Dr Wright may either be deliberately evading service or at least is peripatetic and is very difficult to locate.” This amplified concerns that Dr Wright would seek to take steps to frustrate enforcement of orders against him by dissipating his assets.
Mr Justice Mellor held that Mr McCormack had established a good and arguable case for recovery of costs in the sum of £1.548m. He went even further and described it as a “very strong case” in these circumstances, particular in light of his view that the defamation claim should never have been threatened, commenced, or pursued.
The WFO (and related enforcement measures) was seen to be essential to secure Peter McCormack’s potential recovery of legal costs. The judgment included orders for asset disclosure and enforcement in overseas jurisdictions; Australia, Seychelles, Antigua, and Singapore.
Source
- Craig Wright v Peter McCormack (WFO Judgment) [2024] EWHC 1735 (KB)
- Crypto Open Patent Alliance v Wright [2024] EWHC 1198 (Ch)
