Craig Wright ordered to hand over half of his alleged Bitcoin holdings

https://www.theguardian.com/technology/2019/aug/28/australian-who-says-he-invented-bitcoin-ordered-to-hand-over-up-to-5bn

by gcoleman • 7 years ago

91 51 7 years ago

theguardian.com

tomglynch2• 7 years ago

Seems it was proven he doesn't own those bitcoins, so he's meant to be handing over half of nothing, which is still nothing.

Edit: My statement is incorrect. The amount of bitcoins Craig Wright has access to was not determined in the case, but potentially could be none.

FDSGSG• 7 years ago

How could you possibly prove that he doesn't own those bitcoins? You can prove control, but not lack of ownership unless you just burn the coins.

sp332• 7 years ago

Well, he has been claiming to own them. So the court ordered him to hand over half. I guess he could now try to convince the court that he doesn't own them.

dunkelheit3• 7 years ago

Wright tried to prove that he doesn't control the bitcoins he mined prior to 2013 due to blind trusts, secret sharing schemes and various other excuses. The court ruled that this story is hogwash.

Nursie• 7 years ago

He claims to have them, but not have access to them, as part of a team who invented BTC. This court case awards half of his alleged holdings to the beneficiaries of the estate of his alleged partner.

His ownership of the coins or the validity of his claim to be Satoshi never came up in this case AFAICT...

uoylj• 7 years ago

Wizsec commentary: https://blog.wizsec.jp/2019/08/kleiman-v-wright-part-5.html

Full court ruling: https://www.courtlistener.com/recap/gov.uscourts.flsd.521536...

d33• 7 years ago

This is absurd on so many levels. For example, it's pretty obvious that Bitcoin cannot be valued based on its exchange price in such huge quantities - if any party decided to sell $5bn worth of BTC, the price would obviously go down dramatically at this point. What's the logic behind this order?

9nGQluzmnq3M2• 7 years ago

There are indeed many absurd things about this case, but that's not one of them: the value of anything will collapse if you try to sell a significant fraction of the world's total supply at once.

sk5t2• 7 years ago

"I'm sorry, your honor, the laws of supply and demand make it unpalatable to comply with the court's order."

throwamay1241• 7 years ago

I see you're new to Australian media reporting standards, or lack thereof =)

whyenot• 7 years ago

The Guardian is a British newspaper, not Australian. Also, the trial took place in the United State.

tom_mellior• 7 years ago

The order talks of handing over Bitcoins. The dollar value was added by journalists to illustrate the amount in question.

colonwqbang• 7 years ago

Maybe I missed something, but I don't think there was anything in the order about selling any of the bitcoin.

rtkwe• 7 years ago

They're not ordering him to hand over cash they're ordering him to hand over half the BTC. The cash amount is just there to illustrate just how much 'value' that many coins would have.

dunkelheit3• 7 years ago

(IANAL) The headline is misleading. From the court order:

"the Court deems the following facts to be established for purposes of this action: (1) Dr. Wright and David Kleiman entered into a 50/50 partnership to develop Bitcoin intellectual property and to mine bitcoin; (2) any Bitcoin-related intellectual property developed by Dr. Wright prior to David Kleiman’s death was property of the partnership, (3) all bitcoin mined by Dr. Wright prior to David Kleiman’s death (“the partnership’s bitcoin”) was property of the partnership when mined; and (4) Plaintiffs presently retain an ownership interest in the partnership’s bitcoin, and any assets traceable to them".

Also from the order (and quoted in the article): "The Court also is not required to decide, and does not decide,how much bitcoin, if any, Dr. Wright controls today. For purposes of this proceeding, the Court accepts Dr. Wright’s representation that he controlled (directly or indirectly) some bitcoin on December 31, 2013, and that he continues to control some today."

In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn.

viach• 7 years ago

In other words, Kleiman's estate gets half of some indeterminate amount of bitcoin that Wright mined prior to Kleiman's death. Which as well may be zero, not $5bn.

If Wright is in legal field, I suppose he is in some way forced to make his Bitcoin sell orders public (taxes, anti-laundering regulations etc). So that it is very much decidable, even if not how much he owns, but how much he is spending and when these particular Bitcoins were created.

dunkelheit3• 7 years ago

Agreed, but this is something that I suppose will be determined in the future proceedings. So it is incorrect to say "Wright is ordered to hand over $5bn". To be fair, the headline states "up to $5bn" which is technically correct but still misleading because this "up to" part is not something that one notices immediately :)

tomglynch2• 7 years ago

In 2015 the Australian Tax Office searched Craig Wright's home due to possible tax evasion [1]. I'm not sure of the outcome though. [1] https://www.theguardian.com/technology/2015/dec/09/bitcoin-f...

zelly4• 7 years ago

Forget whether he actually has any bitcoin—there's no way he (or anyone else) would just hand over 500 000 coins just because some local judge said so. That's the whole point of bitcoin: It can't be confiscated. 500k BTC is enough to buy many lifetimes of freedom somewhere on the planet, even if you are wanted dead or alive in a first world country.

close042• 7 years ago

It can't be confiscated

It can't be confiscated if you manage to keep it completely hidden since the second it was mined... just like any other currency. In some ways Bitcoin is a lot more traceable than regular money, which can change hands as cash repeatedly with no traceability.

If a court asks you to hand over something and you refuse you might as well spend time in prison until you have a change of heart. You can be compelled to produce the wallet and since transactions are traceable it's possible to calculate how much BTC was mined.

Unless the BTC was mined into an obscure wallet that can't be traced back to this guy there's no easy (any?) way to hide how much he mined. Because this isn't about how much BTC the guy controls now (he could just transfer it all and claim there's none left) but how much was mined.

im3w1l2• 7 years ago

Nah, even if you know someone controls the coins you can't confiscate them. You can put the person in jail, you can torture them - sure. But until they spit out the key you can't take the coins you know they have.

zelly4• 7 years ago

The difference with btc is that the act of confiscation becomes extracting a passphrase stored in one's mind instead of moving physical atoms. Historically physical assets have been seized countless times.

throwaway_law2• 7 years ago

That's the whole point of bitcoin: It can't be confiscated

Sure, if you rob a bank and bury the money it can't be confiscated either.

However, if you are ordered by a Court to turn over funds (bitcoin or otherwise) and you do not comply with the court order, you can be held in contempt of court and arrested until you comply with the court order.

What good is "many lifetimes of freedom" if you only have 1 life and you're not free?

zelly4• 7 years ago

First of all there is no debtor's prison in the USA. Even if he unequivocally had and owed 500k btc, he could just say no and go about his business. But even if this was a criminal case, the only way the government can get his coins would be:

- torture

- imprisonment and then finding his private keys written down in his house (or similar opsec fail)

This is in contrast to bank/financial accounts (easily garnished by court order), physical paper currency (easily seized by a SWAT team), or physical gold (easily seized by a SWAT team).

They can put you in jail, but they can't take your btc.

simonh• 7 years ago

It depends what you consider freedom. To many, being restricted only to areas outside the reach of an international arrest warrant or extradition arrangement would be a form of incarceration.

duskwuff• 7 years ago

500k BTC is enough to buy many lifetimes of freedom somewhere on the planet

That's debatable. How do you even go about liquidating that much cryptocurrency? Selling it all at once would crash the market; even signalling that such a large amount might be put on the market would probably have an adverse effect on prices.

zelly4• 7 years ago

It doesn't take a full 5 billion USD to escape the country and avoid prosecution. It probably doesn't even take 5 million. When you have that much money, none of the normal rules apply. Really, having 5 billion in New York City versus, say, Ukraine isn't really that much of a difference.

aeternum• 7 years ago

Why does the judgement need to be paid in bitcoin? Why not put leins on Wright's property or salary in order to pay off the judgement.

timwaagh• 7 years ago

It seems like the heirs of the other guy are finding legal ways to rob an insane person. It's gross the judge has not apparantly even considered this. Wright is a pathological liar. He makes stuff up constantly to get attention. Although this is a huge flaw, it's unreasonable to allow this to create facts for some other party that weren't proven in the normal way, ie a written contract.

Vespasian3• 7 years ago

The legal presumptions is that adult persons are able to stand in court and tell the truth. Declaring someone insane (is this even possible in civil cases?) is intentionally hard and must not be used to protect notorious liars.

It's not the plaintiffs fault that Wright sticks to these highly unlikely and susceptible claims. If he is unwilling (because he fears possible sanctions) to come straight, it is own doing.

Maybe he got caught in his own web of lies (an investigation by the Australian tax is mentioned in the order) and sees no way to step back. Maybe he fears the shame of being exposed. Who knows.

I'm sure there is ample legal precedence to establish partnerships and shares in common property in situations without a formal agreement.

SomeOldThrow• 7 years ago

Able to tell the truth, but not will. Courts still need to exercise judgement in evaluating claims.

commandersaki• 7 years ago

Wright is not insane, just a conman.

He sued W&K for 20-40 odd million for bitcoin he lent to the partnership, but in lieu of that asked instead for "Bitcoin" IP. This was all done in Australian jurisdiction. He then used the IP as leverage to acquire Australian R&D grants and was almost awarded a significant amount but instead raised alarm bells. ATO/police cracked down, and somehow Wright got involved with other conmen that paid off the remaining ATO debts - and is still trying to prove to the courts he's Satoshi so he can get a bunch of patents through to start suing virtually everyone in the cryptocurrency space (I'm guessing anyway). That's why he's adamant about claiming to be Satoshi rather than give up in court.

Anyway, that's my take.

bobre• 7 years ago

I'm sure there is ample legal precedence to establish partnerships and shares in common property in situations without a formal agreement.

Like?

ericb• 7 years ago

So, what are the possible outcomes now? He does not have the bitcoin, so what can he do?

- Flee to another country?

- Admit he's not Satoshi?

- Claim the trust "malfunctioned"?

- Appeal?

Do these ultimately boil down to flee the country, or get jailed for contempt?

Taniwha• 7 years ago

or for perjury

Craig Wright ordered to hand over half of his alleged Bitcoin holdings

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