Kleiman v. Wright: Bitcoin’s Trial of the Century Kicks Off in Miami

MIAMI – Ira Kleiman’s civil lawsuit against Craig Wright began in Miami on Monday to possibly answer one of Bitcoin’s biggest mysteries: Who is Satoshi Nakamoto and what happened to the estimated 1.1 million BTC in his possession?

Wright, an Australian computer scientist and early cryptocurrency pioneer, claims to have been the pseudonym creator of Bitcoin since 2016. This suit claims that Wright did not act alone. According to Ira Kleiman, his late brother David – a fellow computer expert and longtime friend of Wright’s – was the co-creator of Bitcoin and is entitled to a share of bitcoin’s trove currently valued at $ 66 billion.

The suit claims that David Kleiman and Wright formed a partnership and established an entity called W&K Info Defense Research, LLC that they used to mine bitcoin and organize their intellectual property, including the source code of Bitcoin.

Ira Kleiman believes his brother was responsible only for mining Satoshi’s bitcoins treasure, and accused Wright of cheating on them by a combination of forgery and deception of David’s estate after his death.

Wright denies the allegations and says that, while David Kleiman was a friend and confidant, the two were never partners and that he alone is Satoshi Nakamoto.

A panel of 10 jurors chosen on Monday will have three weeks to hear the evidence and decide the fate of Satoshi’s fortune.

‘Partnership’ paper trail

In his opening statement Monday, Kyle Rosche, a Kleiman estate attorney, set a timeline for the jury, which aimed to prove Wright’s conflicting statements about the nature of his relationship with David Kleiman.

According to emails shown to the court on Monday, Wright repeatedly called David Kleiman his “partner” and his “business partner” until after his last death in April 2013.

Rosche told the jury that after David Kleiman’s death, Wright’s story began to change: he continued to call David his partner but began to distance himself, and claimed that David had transferred their joint intellectual property into Wright’s possession.

According to Rosche, Wright’s relationship with Kleiman’s surviving family members began to sour sometime in 2015, when Ira was informed by Australian tax authorities that he had fraudulently claimed to pay David Kleiman about $ 40 million for materials belonging to their joint venture, W&K Info Defense Research, LLC.

Rosche told the jury that after 2018, when Ira Kleiman filed a lawsuit against him, Craig Wright began denying that he and David Kleiman had ever been partners – or that he had ever had a partner, other than his wife Ramona Watts.

In a deposit footage dated April 4, 2019, Wright said, “He was never my partner. * I hate the whole concept of partnership.”

Within the defense

Wright’s defense seems largely dependent on two factors: his diagnosis with Autism Spectrum Disorder and the lack of a written agreement between him and David Kleiman.

In her opening statement, Amanda McGovern, counsel for Wright, claimed Wright’s autism made it difficult for him to communicate, too literal and combative. Rather than push back against the veracity of the plaintiff’s timeline, McGovern instead tried to convince the jury that Wright and Ira Kleiman simply have a different understanding of the word “partner.”

McGovern painted a picture of Wright’s lifetime of social hardship, claiming he came from a “very difficult home,” had “very few friends in his childhood” and “he was considered strange … even by his sister.”

“At thirteen, he was wearing a Shinobi costume to a playground and all the other kids called him an idiot,” McGovern said.

For Wright, math and cryptography became a haven away from bullying at home and at school.

According to Rosche, however, Wright’s diagnosis with autism is a recent development: he was diagnosed sometime after 2018 by Dr. Ami Klin, director of the Marcus Center for Autism – and an expert for the defense. Rosche told the jury that Wright was diagnosed over the phone by Klin who, during a diagnosis, never met Wright in person.

Will the real Satoshi please stand up?

While both the plaintiffs and the defense claim that Craig Wright – either alone or together with David Kleiman – invented bitcoin, the reality is more obscure.

In spite of the claims of Wright (like his history of lawsuits against his critics) he could not definitively prove that he was Satoshi Nakamoto.

Post announcing in May 2016 that he would move Satoshi’s bitcoin – proving that he had access to Satoshi’s private keys and therefore was Satoshi – Wright failed to do so, writing, “I don’t have the courage. I can’t,” in a now deleted blog post .

The cryptographic evidence he provided instead has been accused by several high-profile cryptographic experts of being fraudulent.

Previous charges of falsifying documents and other fraud have repeatedly surfaced during the first day of trial, as the plaintiffs’ attorneys pointed to the jury’s examples of Wright’s curated emails that added and removed David Kleiman’s sentences, changed dates and more.

Follow the money

If the jury finds in favor of the plaintiffs and Ira Kleiman gets his brother’s share of Satoshi’s bitcoins, the question remains whether the court has any way to recover them.

The still-unsolved mystery of Satoshi Nakamoto’s identity, and Wright’s apparent inability to take the coins in his wallet, means that recovering the coins may not be possible. If Wright isn’t Satoshi – or if he’s and has somehow lost access to the wallet – it’s unclear how Ira Kleiman will get his hands on half of Satoshi’s preserve.

In addition, there are some in the crypto community who question whether the 1.1 million bitcoins at the heart of this case even exist. In a 2018 blog post, Tokyo-based software developer and self-proclaimed “Bitcoin archaeologist” Kim Nilsson tracked wallet addresses allegedly held by Wright, linking many of them back to the 2014 Mt Gox hack.

Source