Australian Craig Wright at one point claimed to be Satoshi Nakamoto, the mysterious creator of Bitcoin. Though he has backed off from that controversial stance, he remains a highly divisive figure in cryptocurrency.
And that is likely to remain the case following a multibillion-dollar lawsuit that was filed against him by the estate of his former business partner and bitcoin pioneer David Kleiman.
The lawsuit surrounds the ownership of over one million bitcoin, which in today’s market, would be about $4 billion.
Despite several attempts to have the courts declare otherwise, Wright is set to face civil proceedings after a judge allowed the case to go ahead.
Other than the difficult questions that permeate civil procedures, the lawsuit will bring to fore the technicalities of handling disputes and seeking resolutions where the parties in question come from different countries.
Also quite pertinently, the case will have to consider a crypto-existential question of what bitcoin really is, for purposes of clarifying what it means when one says another person stole it from them.
The defendant Mr. Wright met American Dave Kleiman in 2003 with their relationship hinged on business interests in things like ‘the future of money,’ cybersecurity and digital forensics.
Court papers allege that Dave and Craig continued to work together up until 2008 when they developed an interest in Bitcoin. It is while collaborating on this project that the two mined about 1.1 million bitcoins.
Accordingly, it is said that the BTC was stored “in specifically identifiable bitcoin wallets,” the very wallets that Craig Wright has claimed sole ownership.
The case has two plaintiffs, the late Kleiman’s estate and W&K Defense Research LLC, a company owned by Kleiman who died in April 2013.
Plaintiffs alleged conversion claims
The $4 billion case is to proceed after the court allowed it based on a number of requests. Among these claims, is that of conversion; legally, a cause of action that one can take in case another person or entity wrongfully asserts control over their property.
Through conversion, one can get damages equivalent to the value, in this case, Wright would pay the value of BTC should the court find it so.
Reportedly, winning a claim for conversion is usually very hard (bitcoin for money). It mainly stems from the fact that bitcoins “look the same,” more specifically, it’s fungible.
For the conversion case to succeed under the Florida law, the Court points out a number of things that need to come out clearly. Among these, one has to show that they are dealing with “specific and identifiable money and be in “possession or [have] an immediate right to possess that money.”
The court also needs one to show that there has been “an unauthorized act which deprives (the) plaintiff of that money. There also needs to be “a demand” asking a defendant to return the money in question and where the said party refuses to honor that demand.
In the lawsuit against Wright, the court said that the plaintiffs’ claim for conversion of the 1.1 million bitcoins was sufficient under Florida law. The court’s decision did not dwell on the issue of “whether or not bitcoin is “money,” but based it on “bitcoin’s specificity and identity.”
Here, the plaintiffs’ contended that Bitcoin’s blockchain was able to track who owns, transfers or in what wallet one stores the bitcoins identifiable via “public keys.”
Also importantly, the plaintiffs claimed that all the BTC in question had been stored in wallets that they say were “specifically identifiable.”
Wright, on his part, argued that the lawsuit did not “allege exactly how many bitcoins Dave Kleiman supposedly owned at any time in the past.”
However, the court contended that the plaintiffs had made direct allegations, claiming that Wright previously agreed that Kleiman owned, at least, 300,000 BTC out of the over 1 million that was “allegedly held in trust.”
Graig Wright allegedly transferred all the bitcoins to trusts in several locations, including the United Kingdom, the Seychelles, and Singapore.
So, whether you consider bitcoin as money or otherwise, the court has said the case has to proceed.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.