Craig Wright Might Lose Half of his Bitcoin Funds to Kleiman Estate

But that is not a fact yet. That is a puzzle we will have to wait to uncover with time. In the meantime, the elusive myth of Satoshi Nakamoto will continue …
Craig Wright Claims his Bitcoin Inventor

The year long battle between the two supposed brains behind the world largest cryptocurrency, Bitcoin(BTC)trade, might have reached its end already. The presiding judge Judge Bruce E. Reinhart, on Tuesday, gave his final ruling on the case, compelling the self-proclaimed Bitcoin founder Craig Wright to give up half of his Bitcoin wealth to his late partner’s estate, David Kleiman.

You will recall that the court already found Wright’s testimony as unreliable following a series of inconsistent evidence and testimonies. I guess it is a no brainer declaring David Kleiman’s estate the winner of the case. According to the judge’s ruling, Mr. Wright will give up half of all his wealth before December 2013, seeing that his partner died in 2013.

In addition to that, the Australian scientist will have to give up half of his intellectual properties before the end of the year 2013. Should his story of being the inventor of Bitcoin turn out true then the court ruling automatically makes Kleiman a part of the Nakamoto pseudonym.

Filed about a year ago, the estate of late David Kleiman believes that the self-proclaimed Bitcoin inventor must have defrauded them of over a million Bitcoins that rightly belong to David Kleiman due to his partnership with Mr. Wright before his death.

Although Mr. Wright has contested the claim from the beginning, he has failed to produce a convincing evidence that his claims are right. In fact, Judge Beth Bloom of the Florida federal court found him ‘not credible’ after several inconsistencies in his testimonies and documents.

While that may mean that his stand in the case is false, it fails to tell exactly if he is the real founder of Bitcoin or by any means related to the pseudonym.

Who Is Satoshi?

From the onset of the case, the people of the crypto sphere and other members of the public have been of hope that the case may finally reveal whether or not Mr. Wright is the Nakamoto we all seek or, as it is much more probable, there is another out there. So far, the court is yet to determine the credibility of the statement.

From the look of things, however, it is pointing to the direction that Wright is most likely not the real Satoshi in spite of his dogged persistence to prove otherwise. But that is not a fact yet. That is a puzzle we will have to wait to uncover with time.

In the meantime, the elusive myth of Satoshi Nakamoto will continue to grow.

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Australian man who claimed to be Bitcoin creator Satoshi Nakamoto is ordered by US court to hand …

A U.S. court has ordered an Australian man who claimed to be the creator of Bitcoin to pay up to $5 billion to the estate of his former collaborator.

A U.S. court has ordered an Australian man who claimed to be the creator of Bitcoin to pay up to $5 billion to the estate of his former collaborator.

In an order on Tuesday, a federal magistrate judge in Florida ordered Craig Wright to give the estate of Dave Kleiman half of the bitcoin that they mined prior to Kleiman’s death in 2013.

Wright, 48, claimed in 2016 he was mysterious Bitcoin creator Satoshi Nakamoto, though that claim has come under serious doubt.

The court’s order specifically declines to address whether Wright is in fact Nakamoto, and also does not rule on how much bitcoin Wright owns, though the court heard testimony that his cryptocurrency assets could be worth some $10 billion.

Craig Wright is seen outside of federal court in June. A magistrate judge ordered him to hand over half of his bitcoin holdings to the estate of his former partner

Craig Wright is seen outside of federal court in June. A magistrate judge ordered him to hand over half of his bitcoin holdings to the estate of his former partner

Craig Wright is seen outside of federal court in June. A magistrate judge ordered him to hand over half of his bitcoin holdings to the estate of his former partner

The lawsuit does not claim that Kleiman or Wright are the actual inventors of Bitcoin, but instead alleges that the two were heavily involved with bitcoin in its infancy as partners.

Early adopters of bitcoin were able to acquire large quantities of bitcoin through a process known as mining long before its value ever got above a dollar.

For example, an extremely early transaction made on the Bitcoin network was when someone paid 10,000 bitcoins for Domino’s Pizza.

A single bitcoin now trades for roughly $9,699, though prices fluctuate rapidly.

Kleiman’s family alleged that the two men jointly owned roughly 1.1 million bitcoins and a company.

When Kleiman died in 2013, Wright allegedly backdated contracts to transfer the ownership of the coins and intellectual property to him.

Dave Kleiman, who died in 2013, was one of the early programmers involved in Bitcoin

Dave Kleiman, who died in 2013, was one of the early programmers involved in Bitcoin

Dave Kleiman, who died in 2013, was one of the early programmers involved in Bitcoin

Wright argued in court that he became horrified when the Bitcoin network became popular with drug dealers and other criminals, and that he encrypted his holdings and placed them in a blind trust.

He claimed that the encryption keys would be delivered to him in January 2020 by a bonded courier, and that until then he had no access to the bitcoin or even precise knowledge of the amount.

In his order, Judge Bruce Reinhart scoffed at the notion that Wright ‘is a latter-day Dr. Frankenstein whose creation turned to evil,’ calling the tale ‘inconceivable.’

‘I completely reject Dr. Wright’s testimony about the alleged Tulip Trust, the alleged encrypted file, and his alleged inability to identify his bitcoin holdings,’ Reinhart wrote.

‘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,’ the order stated.

The court also ordered Wright to pay the Kleinman estate’s legal fees in the case.

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Bitcoin and Friends Episode 3 Summary and Analysis

Examples include the Mitalik character based on the Ethereum creator Vitalik Buterin. Similarly, Harold is a cautionary tale of early crypto adopters.

Bitcoin and Friends episode 3 recently launched. If you’re familiar with the program, you know the show is deeper than it looks and often requires some unpacking. If you aren’t familiar with it yet, you’re in for a trip.

What Is Bitcoin and Friends?

Bitcoin and Friends is a cartoon entirely funded by cryptocurrency donations. As soon as the group has enough money in donations to pay for an episode, they release a new one.

The episodes chronicle a gritty cartoon version of the early days of the cryptocurrency boom. The timeline doesn’t exactly line up but many of the major events and characters in the show are historically based. Examples include the Mitalik character based on the Ethereum creator Vitalik Buterin. Similarly, Harold is a cautionary tale of early crypto adopters. For more analysis, look at our previous articles on the show, linked in the next section.

Before we proceed, know that the following summaries and analysis will contain episode spoilers. So, if you’re interested in watching the show, you might want to do that first. Episodes are on YouTube and at the website linked above.

A final warning: the show includes drug references, sexual images, and some violence. So, you might not want to use it to educate your children about crypto.

A Look Back at Episodes 1 and 2

The first episode opened with Bitcoin waking up on a table in New Jersey during the Great Recession. Lost and confused, he meets Jones. Jones lost everything in the recession and now sells drugs out of an ice cream truck.

Jones introduces “B” to Harold and Mitalik. Mitalik explains the potential value of Bitcoin and the group set out in search of Satoshi Nakamoto. When the group find just some guy named Satoshi rather than the anonymous creator of Bitcoin, they follow itty bitties that B throws up.

Itty bitties lead them to Pal Fifty, who explains that Bitcoin is on the road to replacing cash.

The second episode opens with the graphic death of Pal Fifty. The group can no longer follow the itty bitties because there are too many miners, causing the coins to scatter. The group splits up.

B becomes depressed and does drugs with Jones, and Harold gives up on cryptocurrency altogether. Mitalik, alone, begins to create the Ethereum project.

Later, B’s mysterious “father” equips B with weapons to use on his journey. These are the Divisibility Dagger, the Sword of Scarcity, the Shield of Durability” and the Portability Pack of Teleportability.

While looking for B, Mitalik and Jones stumble into “freedom fest” where they learn about the Silk Road and meet Ross Fullbrick. At the festival, B uses his new weapons to defeat the US dollar in a boxing match. This gains the attention of big banker Jamus Sapphire.

Episode 3 Plot Synopsis

Episode 3 opens with a farmer being possessed by aliens in a sequence borrowed from the original Men in Black. It then returns to Jamus, unphased at the destruction of the US dollar at the end of the previous episode. The episode follows Jamus to a bank meeting where he introduces “Pulse Loans” – “If you have a pulse, you get a loan.” The idea is to drive people into debt so that they will move into low-income housing. This housing is owned by “Congressman Candy”, present at the meeting. We also learn that a group called “FUD” is controlling Jamus.

We also meet a new character called “Carl” who is released from the state mental ward and returned to FUD.

Meanwhile, Bitcoin and Jones meet with Fullbrick, who convinces B to work for the Silk Road. He explains that B’s destiny is to help fight the systemic use of force by decentralising money, and thus, power. Jones is unconvinced and returns to his search for B’s father. However, he is unable to recruit Mitalik, as he is busy on the Ethereum Project. He managed to create Ethereum but it appears as a disfigured character reminiscent of Frankenstein’s monster.

Ethereum; Source: YouTube screenshot

In the meantime, we learn that the job of the alien from the beginning of the episode is to destabilise the planet. Other aliens explain that decentralisation is the next step in a species evolution. Bitcoin will usher in a new era if we are not careful. We cannot allow humans to advance into a great civilisation. His job is to create a “great diversion”.

Carl cripples the Silk Road by putting in more orders than they can fill. So, Fullbrick sends B on vacation. B trades in his itty bitties for cash and goes on a spending spree. He also uses the tools given to him by his father to impress a group of friends. However, they abandon him when he runs out of money.

Bitcoin tries to impress new group of friends; Source: YouTube screenshot

Finally, the alien creates Litecoin by plugging his computer into a vat of cow dung.

References and Easter Eggs

Some of the characters we have already examined here and in our previous episode analysis articles. Ross Fulbrick is based on Ross Ulbricht, a real-life founder of the Silk Road.

Jamus isn’t likely to be any one person, but rather represents big banking in general. It is unclear whether Congressman Candy is based on anyone but is more likely to represent political corruption. Similarly, Carl is probably a composite of the law enforcement that pursued Ulbricht rather than any one person.

As for FUD, we don’t know much about the organization in the show. However, the acronym commonly stands for “Fear, Uncertainty and Doubt”, though in the show it’s an acronym for Federal Undercover Detective Agency.

I probably don’t need to point out that the show’s depiction of the creation of Litecoin makes it a literal “shitcoin”, which is also a derogatory term for altcoins. The alien who creates Litecoin is obviously Charlie Lee.

Litecoin; Source: YouTube screenshot

The episode was composed more of symbolic actions than symbolic characters. B’s use of his weapons to impress others likely represents people not appreciating Bitcoin for its true potential. Similarly, the friends that abandon B are likely people who sell their Bitcoin when the value drops.

Once again, Bitcoin and Friends has given us a nitty-gritty representation of the early days of crypto. The next episode is well on its way, and we’ll be waiting for it.

Jon Jaehnig is an American freelance writer specializing in Technology and Health. Jon has degrees in Scientific and Technical Communication and Journalism from Michigan Technological University and lives in Michigan’s Upper Peninsula with his wife and cat. For more from Jon, you can follow him on LinkedIn and Twitter.

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Judge savages self-proclaimed bitcoin inventor Craig Wright

Ethereum creator Vitalik Buterin labeled Wright a “fraud” last year. Of course, another possibility is that Wright isn’t Nakamoto but did mine some …
Craig Wright, right, arrives at federal court in West Palm Beach, Florida, on June 28, 2019.
Enlarge/ Craig Wright, right, arrives at federal court in West Palm Beach, Florida, on June 28, 2019.
Saul Martinez/Bloomberg via Getty Images

Australian Internet personality Craig Wright claims he is bitcoin inventor Satoshi Nakamoto. A lot of people don’t believe him. But one person who does believe him is Ira Kleiman, the brother of deceased technologist Dave Kleiman. According to possibly forged emails published by Gizmodo in 2015, Wright and Kleiman worked together to develop and launch bitcoin in 2008 and 2009.

Those documents suggested that Wright and Kleiman collaborated to mine hundreds of thousands of bitcoins in 2009 and 2010. That would make Ira Kleiman the heir to a multibillion-dollar fortune. So last year, Kleiman sued Wright, seeking his share of the Nakamoto bitcoins.

Kleiman and Wright have been battling in a Florida courtroom ever since. In a Tuesday ruling, federal Magistrate Judge Bruce Reinhart savaged Wright for repeatedly misleading the court and generally wasting everyone’s time.

Wright claims that after drug dealers and human traffickers started using bitcoin, Wright got spooked and decided to dissociate himself from the cryptocurrency. He created a legal entity called the Tulip Trust, with him and Dave Kleiman as trustees. Then he encrypted the keys to his bitcoin holdings using an encryption scheme that required multiple keys to unscramble the data. With Kleiman dead, Wright claims he can no longer unscramble the file.

Judge Reinhart isn’t buying it.

“Dr. Wright’s demeanor did not impress me as someone who was telling the truth,” the judge wrote. “I completely reject Dr. Wright’s testimony about the alleged Tulip Trust, the alleged encrypted file, and his alleged inability to identify his bitcoin holdings.” Indeed, Reinhart concluded that “Wright’s testimony that this trust exists was intentionally false.”

“Dr. Wright’s story not only was not supported by other evidence in the record, it defies common sense and real-life experience,” the judge added. More generally, Reinhart found that Wright’s “non-compliance with the court’s orders is willful and in bad faith.”

The judge invited Kleiman to submit a request for attorney’s fees in the case. And crucially, he ruled that any bitcoins Wright mined prior to 2013 were the joint property of Wright and Kleiman.

The judge didn’t decide whether Wright is Satoshi

The entire case has an air of unreality because Reinhart’s ruling doesn’t address the most important question: do the bitcoins exist at all?

Bitcoins were easy to mine in cryptocurrency’s early years. Forensic analysis indicates that more than 1 million bitcoins were mined in 2009 and 2010 and haven’t been moved since then. These bitcoins are now worth around $10 billion. It’s widely assumed that many of these bitcoins belong to bitcoin creator Satoshi Nakamoto. Kleiman’s lawsuit is based on the assumption that Wright is Nakamoto and controls those bitcoins.

But if Wright isn’t Nakamoto, then there’s no reason to think Wright has a million bitcoins—or anything close to that figure. Kleiman and Wright might be fighting a legal battle over bitcoins that don’t exist.

But Tuesday’s ruling doesn’t address this issue. “The court is not required to decide, and does not decide, whether defendant Dr. Craig Wright is Sata[o]shi Nakamoto, the inventor of the bitcoin cybercurrency,” Reinhart wrote.

There’s a lot of reason to doubt Wright’s claim to Nakamoto’s mantle. Key pieces of evidence linking Wright to Nakamoto appear to have been forged years after the fact. More importantly, if Wright wanted to prove that he is Nakamoto, he could do it quite easily by producing a cryptographic signature using a private key associated with Nakamoto’s identity. Wright has ducked repeated challenges to do this.

Ethereum creator Vitalik Buterin labeled Wright a “fraud” last year.

Of course, another possibility is that Wright isn’t Nakamoto but did mine some bitcoins in the early years of the cryptocurrency—either with Kleiman or on his own.

In any event, Reinhart’s Tuesday ruling doesn’t end the case—far from it. Wright will be given yet another opportunity to produce information about his bitcoin holdings. If he can’t do so—and can’t convince the judge that he’s incapable of doing so—he could face more serious consequences, including a finding of contempt. On the other hand, if Wright does produce a credible record of his bitcoin holdings, the case will proceed to a legal fight over how much of Wright’s fortune properly belongs to the Kleiman estate.

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