On February 5th, the legal battle between Craig Steven Wright and his team of lawyers against the non-profit organization COPA is expected: the current situation and details.
Craig Steven Wright’s legal battle does not stop and will continue at least until February 5, 2024.
After claiming to be Satoshi Nakamoto, since 2016 Craig Wright has been taking legal actions in UK courts against anyone online accusing him of being a fraudster. The reason is that in the United Kingdom, defamation laws are particularly favorable to the plaintiff: the burden of proof lies with the accused, meaning it is the latter who must demonstrate that their statements are not defamatory. This is a substantial difference compared to many other legal systems, where the plaintiff must prove that the statement is defamatory.
The first case was filed against Peter McCormack, the host of the podcast “What Bitcoin Did.” The legal battle arose from an episode in 2019 where McCormack referred to Wright as a “liar and fraudster.”
The trial took place at the High Court in London and concluded in July 2023 with a verdict that, only formally, ruled against McCormack but, in fact, could be considered in his favor. The judge determined that McCormack had the right to express his opinions about Wright but also stated that he had made false statements to support his opinion. In particular, McCormack had claimed that Wright had forged evidence to prove he was Satoshi Nakamoto. The judge ruled that McCormack did not have sufficient evidence to support this claim. Therefore, in the first-instance judgment, McCormack was ordered to pay Wright a symbolic compensation of £1.
In the reasoning of the judgment, the judge wrote:
“The deliberately false claim of serious harm put forward by Dr. Wright until a few days before the trial requires more than a mere reduction of damages. In my view, it is inconceivable that Dr. Wright receives more than nominal damages.”
Subsequently, Wright appealed against the judgment, but the appeal was rejected by the Supreme Court on January 26, 2024. The Court of Appeal upheld the first-instance judgment, stating that McCormack had the right to express his opinions about Wright.
The second legal case involved Magnus Granath, known on Twitter by the pseudonym Hodlonaut.
Granath repeatedly referred to Wright as a “pathetic fraudster,” “cringe,” and “clearly mentally ill,” asserting that he was not Satoshi Nakamoto.
As a Norwegian citizen, in 2019 Granath filed a lawsuit against Wright in his home country to successfully obtain the dismissal of the British proceedings due to lack of jurisdiction. The hearings were held in Oslo, and on October 20, 2022, the verdict was announced. In addition to ordering Wright to pay Granath 4,053,750 Norwegian kroner for legal expenses, equivalent to $383,000, for the first time, a court expressly pronounced on the true identity of Satoshi Nakamoto:
“Both parties attempted to prove respectively that Wright is and is not Satoshi Nakamoto. The court emphasizes that the evidence presented in the case is not sufficient to change its prevailing opinion, according to which Craig Wright is not Satoshi Nakamoto. Various documents were produced, which Wright claims to be initial versions of the White Paper and source code. Forensic analyses by KPMG (on behalf of Hodlonaut) and BDO (on behalf of Wright) found that these documents contain, at best, inexplicable changes likely made after the declared date of the documents. Granath had sufficient factual basis to assert that Wright had lied and cheated in an attempt to prove to be Satoshi Nakamoto. The statements are not illegal.”
The court ruled that the terms used by Granath against Wright were not defamatory, also considering that the evidence presented by Wright to support his claim of being the true Satoshi Nakamoto was not convincing. To defend himself, Hodlonaut was forced to reveal his identity and spend approximately $2.4 million on legal expenses.
The current situation
In 2021, Craig Wright’s company, Tulip Trading, filed a lawsuit against 12 Bitcoin Core developers, asking them to rewrite the Bitcoin code to grant access to 111,000 bitcoin. Wright claimed that the private keys were allegedly stolen from his computer.
In the following years, Wright decided to initiate further legal action against 15 Bitcoin Core developers and a group of companies, such as Blockstream, Kraken, Coinbase, and Block. He alleged “violations of his copyright rights” regarding the “Bitcoin’s white paper, Bitcoin file format, and Bitcoin blockchain database.”
As a result of the legal actions initiated by Wright, in April 2021, the group of developers and involved companies represented by the non-profit organization Cryptocurrency Open Patent Alliance (COPA) decided to sue the Australian entrepreneur, accusing him of falsifying documents to support his claim to be Satoshi Nakamoto.
The Cryptocurrency Open Patent Alliance is a non-profit organization of individuals and companies formed to promote the adoption and advancement of cryptocurrency-related technologies and to remove patents as a barrier to growth and innovation.
On December 15, 2023, during a pre-trial review, Judge Edward James Mellor ordered Craig Wright to pay an amount of £800,000 to cover costs and support the legal expenses of the developers. Wright had already paid a sum of £100,000 earlier as bail for the trial.
In addition to postponing the trial to February 5, the British judge also accepted the request for the presentation of new evidence regarding the identity of Satoshi Nakamoto, allowing Wright to submit 97 documents that emerged in support of his claim. The documents were reportedly found on two USB drives discovered in a drawer of his residence in September and would include the LaTex file, the open-source software used in the preparation of the Bitcoin White Paper.
Accusations by developers
During the lawsuit, Bitcoin Core developers accused Wright of creating ad hoc evidence, forging and manipulating data, and intentionally prolonging legal proceedings. According to them, the new documents emerged only after developers had submitted 50 pieces of evidence to demonstrate that the materials previously provided by Wright were false.
On December 15, Judge Mellor finally ordered Wright to pay £65,000 to cover COPA’s costs related to the evidence regarding his Autism Spectrum Disorders (ASD). Wright claims to be affected by ASD and, for this reason, formally requested to receive written questions for the cross-examination. Typically, these questions are asked verbally in real-time to ensure the spontaneity of the responses. Wright’s request appears to be a way to gain more time to prepare his responses in court.
The request was contested by the developers, who hired an expert to verify the actual disability of the Australian entrepreneur. Consequently, Wright will only be allowed access to the LiveNote Stream deposition software and will write the questions on paper during the trial.
Wright’s request for settlement
On January 24th, Wright sent an non-negotiable offer to COPA to resolve the cases discussed in the legal battle.
Wright’s offer expresses the willingness to reach an agreement on multiple cases of prolonged legal disputes initiated by him. The proposed settlement includes Wright waiving the “copyright rights” on the “databases of Bitcoin, Bitcoin Cash, and ABC (a fork of Bitcoin now rebranded as ‘eCash’).” and offering an irrevocable license to the opposing parties that “collectively control, manage, and/or own those blockchains”:
“In clear demonstration of the sincerity of my offer, I agree to waive my database rights and copyrights relating to BTC, BCH and ABC databases, and to offer an irrevocable licence in perpetuity to my opposing parties who collectively control, operate, and/or own those databases, in pursuit of encouraging the open commercialisation of technologies in a competitive and fair market, where intellectual property rights are respected and exploited. I intend for this offer to enable them to compete fairly, in parallel with BSV.
I believe the settlement terms are broadly uncontroversial, beneficial to the industry as a whole, and intended to draw a fresh start in the history of Bitcoin to guarantee its success in whatever form it takes.”
The offer had seven days to be reviewed, but COPA responded within a few hours, announcing through a tweet its intention to reject Wright’s settlement offer.
Paul Grewal, Chief Legal Officer of Coinbase, also explained in an article the reasons why it is time to put an end to Craig Wright’s campaign of false intellectual property claims:
“Wright must be stopped permanently from making such claims, threatening developers and companies with fraudulent intellectual property litigation and consuming valuable time and resources necessary to build the innovative products that a modern financial system requires.”
Now, all eyes are on February 5th, the day when the legal battle between Craig Steven Wright and the non-profit organization COPA is set to take place.
