Craig Wright to pay 100 million in Kleiman v Wright $56B case
The Kleiman v Wright case in Florida is a significant legal case in the history of blockchain technology concerning the Kleiman Estate v. Dr. Craig Wright (US and UK copyright holder of the Bitcoin Whitepaper).
At stake is 1.1 million Bitcoin, a value of over $56 billion, which, it is claimed only the creator of Bitcoin could have mined. It was Dr. Wright's intention to prove his exclusive ownership and direct these funds to charitable use, lifting people in developing countries out of poverty.
Bitcoin mining 101
Yesterday a Florida jury found that Dr. Wright did not owe half of 1.1 million Bitcoin to the family of David Kleiman. The jury did award $100 million in intellectual property rights to a joint venture between the two men, a fraction of what Kleiman's lawyers were asking for at trial.
The jury had to reach a verdict on 25 points on the verdict form. The jury's finding is that Dr. Wright is liable to W&K Info Defense Research LLC. No compensatory damages were awarded to the Estate of David Kleiman. 100 million dollars were awarded to W&K Info Defense Research LLC.
Currently the W&K case is tied to the probate case for Dave Kleiman and indicates that Wright's ex-wife and Dr. Wright himself are beneficiaries of W&K along with David Kleiman. Documents pertaining to this on-going case are available from the website of the clerk of the court.
After the verdict Dr. Wright said: "Thank you everyone for their support. This has been a remarkably good outcome and I feel completely vindicated. Next there are still more fights; we are going to make everything change from cryptocurrency to digital cash the way it is meant to be. My original vision is coming back."
In a statement Dr. Wrights lawyers said:
The decision reached by the jury today reinforces what we already knew to be the truth: Dr. Craig Wright is Satoshi Nakamoto, the sole creator of Bitcoin and block chain technology, and Craig Wright did not form a partnership with David Kleiman to mine Bitcoin.
Thankfully, the jury recognized the overwhelming evidence — that Dr. Wright holds 3,208 patents related to Bitcoin and blockchain technology, he has written extensively about Bitcoin and its underlying code, and has restored the original bitcoin protocol in Bitcoin Satoshi's Vision (BSV).
Now that this case confirmed the origins of Bitcoin's creation, Dr. Wright plans to make good on his promise to empower marginalized groups through the greatest financial equalizer of the modern era: Bitcoin Satoshi's Vision will allow people to steadily become part of the global capitalist world – start selling, trading, building themselves, not because they have to take handouts from the government, but because they can work with dignity for themselves.
Dr. Wright plans to make Bitcoin Satoshi's Vision something that's sustaining and sustainable that lasts.
In a tweet Ira Kleiman's lawyers said: "Kleiman v. Wright update: We are incredibly gratified the jury found Craig Wright has to pay our client, W&K, $100,000,000 for the bitcoin-related assets he stole. This is a great win for our client and for justice!"
History of the case
Dr. Craig Wright and David Kleiman were friends and worked together. They had known each other since 2003 and Dr. Wright considered Kleiman a very close friend. Kleiman never made any indication when he was alive that Dr. Wright owed him anything and they had a positive friendship up to Kleiman's death.
The lawsuit has been filed by Ira Kleiman, David Kleiman's estranged brother.
Ira Kleiman intended to show that there was evidence to show a partnership between Dr. Craig Wright and David Kleiman – that they worked together, and were close friends, and Dr. Wright called him his partner.
Dr. Wright became emotional in court while discussing his friendship with David Kleiman, signaling the strong relationship they shared and the positive regard he still has for David.
David Kleiman's estate alleges that Dr. Wright and Kleiman together are the true owner of those coins. The estate asks for up to 50%, not for 100%, as they acknowledge Craig Wright's role in inventing Bitcoin. The coins have never moved and are still there, and therefore recoverable.
Defense attorney Andres Rivero reviewed new batches of emails before the court showing correspondences with Craig Wright and Dave Kleiman in 2011 on a proposal to the Department of Homeland Security for another project.
The correspondences between the two spelled out a mutual partnership on this particular initiative. "Maybe we could write a paper together," said Kleiman to Wright. "Why don't we do a partnership?"
No such correspondence between the two regarding the Bitcoin White Paper was produced in court. The defense showed how Ira Kleiman wrote over David Kleiman's hard drives containing potentially sensitive data.
Computer engineer and scientist Nicholas Chambers reviewed the hard drives in Ira Kleiman's possession and showed that 13 of 14 of them had been overwritten and reused, after Dr. Wright warned Ira Kleiman against re-using Dave Kleiman's devices in case any valuable information was left on them.
Chambers said he found encrypted information on the devices, and although he did not find any Bitcoin private keys, he did find one Bitcoin public key.
Don Lynam, former Royal Australian Air Force Wing Commander and Dr. Wright's maternal uncle, testified that Craig Wright in 2007 developed a digital token translatable to any currency, and in the summer of 2008 shared an early draft of the Satoshi Bitcoin White Paper, telling him that he would be publishing it under a pseudonym.
Mr. Lynam's testimony does seem to be some of the strongest statements on record pointing to the fact that Craig Wright is Satoshi Nakamoto – although this inference was not in the civil case.
Craig Wright's ex-wife Lynn Wright's video deposition was shown to the court. In it, she said that W&K was created solely to compete for government contracts with the United States Department of Homeland Security using David Kleiman's citizenship and status as a veteran.
She said W&K had little to do with Craig's activity and nothing to do with his development of Bitcoin.
To read commentary on the case check out Carolina Bolado's Twitter timeline as she live-tweeted the proceedings in the court, following up with an online article about the case.
Recent court cases
Dr. Wright is no stranger to the court. In February 2021 Dr. Wright's legal team began legal proceedings against the developers of the Bitcoin protocol, and in October 2021 the High Court handed down its judgment on the Pre-Trial Review of Dr. Wright's ongoing defamation claim against podcaster Peter McCormack.
The Court was asked to determine a number of applications and cross-applications brought by the parties. The proceedings relate to 14 tweets and one YouTube video which the Defendant published between March and October 2019 accusing Dr. Wright of fraudulently claiming to be Satoshi Nakamoto, the pseudonymous inventor of Bitcoin.
Simon Cohen of ONTIER LLP said:
This judgment represents a comprehensive victory for Dr. Wright. The long-running dispute has endured various attempts by the defendant to change course but finally, the Court has found McCormack's draft re-amended defence amounted to a reverse innuendo plea, meaning he was trying to introduce pleadings into his serious harm defence that he had already withdrawn from his truth defence.
According to the Court, these specific passages were also an improper attempt at circumventing the rule in Dingle v Associated Newspapers, which does not allow for reliance on other publications to mitigate the offensive nature of your own publication. We now look forward to trial where Dr Wright will prove the serious harm caused to him by McCormack's publications.
The Court also granted Dr. Wright's various applications to amend the Claim Form.
Disclosure: I have earned under $50 in Bitcoin from my postings on the social network Twetch. I have never bought, sold, or mined any type of Bitcoin.