Gavel and bitcoin law
Blockchain Cryptocurrency Weekend Read

How Could Judge’s Indictment of Craig Wright’s Satoshi Nakamoto Claims Impact the Crypto Industry?

This week, the judge overseeing a case between the Cryptocurrency Open Patent Alliance (COPA) versus Craig Wright, ruled that the defendant is ‘not’ Satoshi Nakamoto, the identity responsible for inventing Bitcoin, citing an ‘overwhelming’ amount of evidence. 

Craig Wright, the Australian computer scientist who established nChain, the blockchain technology, IP licensing and consulting service provider, has purported that he is the individual behind the Nakamoto pseudonym for a little shy of a decade.

COPA, a non-profit community seeking to remove patents and litigation as a barrier to growth in crypto backed by former Twitter CEO Jack Dorsey, began its case against Wright, recognising the harmful impact his claims, which they believe to be false, could have on the cryptocurrency industry as a whole.

The two-month-long case ended on Thursday with Judge Justice Mellor siding with COPA, who shared his verdict as soon as court proceedings concluded; driven by the significant amount of evidence damning Wright’s defence to defeat.

“This ruling will have a significant impact on the future of crypto,” a COPA spokesperson exclusively told The Fintech Times:Our intent with this trial was always to protect the open-source developer community – made up of volunteers, coders and computer scientists.

“They work, voluntarily, to maintain and improve the network, often without benefitting from any form of financial gain. By proving that Craig Wright is not Satoshi, these individuals will be able to carry on that important work without the threat of litigation. The chilling effect that Craig Wright was having on the community will end. That is why we called the ruling a win for developers, for the entire open-source community, and for the truth.”

Mellor delivered his verdict on the same day that Bitcoin hit a new all-time high, surpassing $73,000. The crypto’s remarkable recovery since a drastic fall in value between November 2021 and December 2022, signifies the continued popularity of the crypto world – and highlights the importance of substantiating Wright’s claims more than ever.

More court battles to come? 

While COPA is positive about the case’s result, the Wright saga could be far from over, with it remaining possible that he be charged with criminal fraud offences, depending on whether any of the evidence he put forward is decided to have been forged.

Gareth Dickson, a partner in Mishcon de Reya's innovation department, on Craig Wright Nakamoto case
Gareth Dickson, a partner in Mishcon de Reya’s innovation department

Gareth Dickson, a partner in London-based independent law firm Mishcon de Reya‘s innovation department, explains: “The judge’s finding that the evidence against Dr Wright’s claim was ‘overwhelming’ is hugely significant.

“First and foremost, it means that Dr Wright cannot now assert this claim against third parties, whether for defamation or for passing off. Perhaps more importantly for Dr Wright personally, it suggests that there were serious problems with parts of the evidence put before the court, some of which have been alleged to have been forged. If the judge were to find that evidence had been forged, it would be a very serious matter indeed.

“Most importantly of all, the speed and certainty of this finding shows that the English courts are very well-suited to dealing with technically complex disputes involving emerging and developing technologies. The English courts have shown, again, that they can provide one of the best forums in the world for determining these sorts of cutting-edge disputes.”

Undermining Wright’s other cases and claims

While this situation saw COPA bringing a case against Wright, he is also involved in several court cases in which he is taking action against organisations in the crypto and blockchain space.

Louise Abbott, crypto partner at London-based Keystone Law, on Craig Wright Nakamoto case
Louise Abbott, crypto partner at London-based Keystone Law

Louise Abbott, crypto partner at London-based Keystone Law, also reveals how the result of this case could have significant implications for the other cases Wright is involved in: “A full Judgment is yet to be handed down, so it is unclear yet whether Wright will be prevented (by way of injunctive relief) from continuing his claim to be Satoshi.

“Wright’s case largely rested on apparent inconsistencies being due to logistical glitches and tampering – which was found to be false. Wright’s dramatic loss will significantly weaken his claims in the passing off case, potentially affecting his ability to assert intellectual property rights related to Bitcoin.

“The database rights case involves Wright’s claims against various entities, including BTC Core, Coinbase, and Blockstream. He alleges a violation of his copyrights to the Bitcoin whitepaper and database rights to the Bitcoin blockchain.

“This week’s findings will dramatically affect his prospects of succeeding in these arguments. The judgment will undermine Wright’s ability to assert exclusive rights over the Bitcoin whitepaper and blockchain data. This Judgment will have far-reaching effects which will ripple across all related cases, and the broader crypto community.”

Impacting ‘key issues about the liability of software developers’?

The ruling could also impact another case involving Tulip Trading Limited, a holding company founded by Wright, which claims that access to its Bitcoin holdings, valued at a total of around $4.5billion, was lost during a hack which deleted the private keys required to access the cryptocurrency tokens.

Tulip Trading is suing a group of Bitcoin developers, suggesting they should be required to assist it in retaining control and access to the Bitcoin it owned.

Chris Recker, senior associate in the dispute resolution team at Kingsley Napley
Chris Recker, senior associate in the dispute resolution team at Kingsley Napley

Chris Recker, senior associate specialising in digital assets in the dispute resolution team at Kingsley Napley, another London law firm, says: “The wider impact concerns some of the arguments that are being deployed in the separate but related Tulip Trading case. Today’s judgment could mean that the Tulip Trading case is compromised at an earlier stage or that determinations are not made on key issues about the liability of software developers. This could impact potential asset recovery options for victims of fraud.

“In particular, victims, or those whose clients are victims of fraud, were expecting the Tulip Trading case would help to clarify the issue of developer responsibility for applying software patches to enable users to access lost private keys or addresses. Many saw the potential of this case to enable new and innovative asset recovery strategies. However, all is not necessarily lost since it is conceivable that others may choose to take on that battle even if the Tulip Trading matter is compromised.

“Today’s ruling will be a blow to some, but important clarity for others. There is undoubtedly more to come, particularly when the written judgment is available (although it is currently unclear if that judgment will be subject to an appeal in the very near future).”

Author

Related posts

Lunu: The Benefits of Crypto and Why PayPals Bitcoin News Received Mixed Responses

Polly Jean Harrison

Expo 2020 Dubai and the Wider Fintech Landscape in India

Richie Santosdiaz

An Evaluation of SUSE’s Manager for Retail 4.2 With Jason Phippen

Tyler Pathe