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The Bitcoin Inventor Dispute

Author: Syedur Rahman  15 March 2024
2 min read

Syed Rahman considers the issues and implications related to the ruling that Dr Craig Wright did not create the cryptocurrency.

After a five-week trial at the High Court, the judge has ruled that Australian computer scientist Craig Wright is not the inventor of Bitcoin.

Mr Justice Mellor made his ruling as soon as the proceedings had concluded, adding that he was able to reach a decision so quickly because the evidence was “overwhelming".

Since 2016, Dr Wright has claimed to be Satoshi Nakamoto; the name that has been used by the founder of Bitcoin. The Australian’s claim has been questioned for years by crypto experts. Dr Wright has pursued a series of lawsuits claiming rights to the Bitcoin whitepaper, the Bitcoin technology and stashes of Bitcoins, while also claiming defamation.

This latest case, heard at the Intellectual Property Court, involved a group of Bitcoin companies known as the Crypto Open Patent Alliance (COPA); whose members include Twitter founder Jack Dorsey's payments firm, Block.

 

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COPA accused Dr Wright of carrying out “a massive campaign of dishonesty and forgery" that had "deadly serious" consequences as he had pursued claims involving billions of dollars.

Dr Wright's legal team had argued that if he were not Bitcoin’s inventor then the real Satoshi Nakamoto would have come forward to discredit him.

But the judge stated that he was satisfied Dr Wright was “not the person who adopted or operated under the pseudonym Satoshi Nakamoto’’ or the author of the Bitcoin whitepaper. He said he would give a full written judgement in due course.

The fact that the judge gave his decision immediately seems to suggest that the evidence was so clearly against Dr Craig Wright that the appropriate decision to be made was relatively obvious.

The full judgment will address all allegations of fraud and 46 allegations of forgery of evidence. It is, however, only a decision in the High Court. Given Dr Craig Wright’s litigious history, there may well be an appeal in the future.

 

Implications

The implications of this case are significant. COPA’s intention when issuing these proceedings was to prevent Dr Wright from taking legal action against developers and other members of the crypto community and from claiming intellectual property rights over Bitcoin’s open-source technology. That has now been achieved.

The judgement will also have an effect on Dr Wright’s other litigation - including his claim against a group of Bitcoin developers - and on his ability to claim any intellectual property rights over the Bitcoin whitepaper. It will certainly hamper his passing-off claim against Kraken and Coinbase, in which he is currently claiming that these exchanges are not selling Bitcoin but are selling his intellectual property.

COPA is also seeking injunctions that prevent Wright from claiming to be Satoshi Nakamoto, asserting authorship of the Bitcoin whitepaper and pursuing more litigation against members of the crypto community.

The organisation FaketoshiSUX has made public statements about their intention to bring class-action lawsuits against Wright for years, accusing him of misleading them into believing he was Satoshi Nakamoto. They allege that Wright influenced them to transfer their savings and investment in Bitcoin into Bitcoin Cash (BCH) and then later Bitcoin SV (BSV), which could have potentially caused losses totalling billions of dollars.

The future of this action remains at best uncertain, but there is the possibility that it may now add to Dr Wright’s troubles. These problems include significant reputational damage, given the High Court outcome and the claims of fraud and perjury that have been made.

The High Court case may well call into question the legitimacy of Wright’s links to cryptoassets and crypto technologies. Not only will this impact their market value, it may also prompt considerable attention from regulators worldwide.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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