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Self-Proclaimed Bitcoin Creator Slammed by Judge, Ordered to Pay Up to $5B

Craig Wright made "intentionally false" testimony and produced backdated documents says judge who calls the self-proclaimed Bitcoin creator's story "inconceivable."

by Jordan Pearson
Aug 28 2019, 4:31pm

Wright arrives at federal court in West Palm Beach, Florida, U.S., on Friday, June 28, 2019. Photographer: Saul Martinez/Bloomberg via Getty Images

There are bad days, and then there are days when a magistrate judge in a federal court blatantly calls you a liar.

Craig Wright, an Australian man who claims to be pseudonymous Bitcoin inventor Satoshi Nakamoto, had a really, really bad day on Tuesday.

On that day, Magistrate Judge Bruce Reinhart ruled that Wright owes half of any bitcoins that he allegedly mined with deceased computer programmer Dave Kleiman to Kleiman's estate, as well as 50 percent of any intellectual property related to Bitcoin. Reinhart "completely" rejected Wright's testimony about key matters as conflicting and "intentionally false."

Dave Kleiman's brother, Ira, sued Wright last year on behalf of his brother's estate for up to 1,100,111 bitcoins (currently worth more than $10 billion USD) after Wright reached out to the family and claimed that he and Dave Kleiman had co-created Bitcoin—something Wright also claimed in 2015 when he went on a press tour claiming to be Bitcoin's co-creator.

Wright allegedly told the family that he and Kleiman had formed a technology company and mined bitcoins together between 2011 and 2013, and that Kleiman had transferred complete ownership to Wright. The family suspected forgery, however—including a signature that appeared to have been generated by a computer font—and sued Wright for allegedly trying to keep everything for himself.

The lawsuit so far has been incredibly messy. According to Magistrate Judge Reinhart's decision, Wright made inconsistent statements, changed his story, and produced fraudulent and backdated documents. (Motherboard found that some of the evidence Wright used in 2015 to claim he was Satoshi Nakamoto was also backdated).

According to the judge, "Dr. Wright’s demeanor did not impress me as someone who was telling the truth. When it was favorable to him, Dr. Wright appeared to have an excellent memory and a scrupulous attention to detail. Otherwise, Dr. Wright was belligerent and evasive."

According to the court decision, Wright claims that a bonded courier will arrive at some point in January 2020 with the needed keys to access his bitcoins. In general, Magistrate Judge Reinhartfound that Wright's story, in which he said he invented Bitcoin but chickened out of taking credit once it was used by criminals, then enlisted Kleiman, and bonded a courier for 2020, "defies common sense and real-life experience." The judge added, "Inconceivable."

This case is not over, despite the court's ruling that Wright and Kleiman split ownership of any bitcoins and intellectual property that came out of their partnership 50-50.

For one, it is not clear how many bitcoins are actually in play or if Wright even has access to them, if he ever did. Remember, the entire story about Kleiman and Wright inventing Bitcoin together came from Wright himself, who has now been proven in court to be an unreliable narrator. Magistrate Judge Reinhart's decision opens by establishing that the court is not deciding on whether or not Wright is Satoshi Nakamoto, nor how many bitcoins ("if any") he actually controls today.

Assuming some mined bitcoins do exist, it looks like Wright might now be on the hook for a tidy sum.

Correction: An earlier version of this article incorrectly spelled Magistrate Judge Bruce Reinhart's surname. Motherboard regrets the error.

Tagged:
Bitcoin
Satoshi Nakamoto
craig wright
dave kleiman
craig wright trial
5 billion