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Bitcoin The Courts

Bitcoin Developers Push Back Against Craig Wright's Claim to Billions of Dollars in Bitcoin (coindesk.com) 82

Posted by BeauHD from the fraud-alert dept.
Long-time Slashdot reader UnknowingFool writes: In 2021, Craig Wright sued 12 bitcoin developers who refused help him recover 111,000 bitcoins he claimed were lost in a hack. His company, Tulip Trading, wanted the developers to put in a backdoor mechanism in bitcoin that would override the ownership of the coins, arguing it was the developers "fiduciary duty" to assist him. The developers allege (PDF) that Tulip and Wright never owned the coins and the evidence of ownership provided is "fabricated." Tulip Trading "never owned the digital assets and has commenced this claim fraudulently and in reliance on fabricated documents," the developers' lawyers said in a statement. "Dr. Wright has a long history of fraud, forgery, and dishonesty ... [and is using] the English courts as an instrument of fraud."
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Bitcoin Developers Push Back Against Craig Wright's Claim to Billions of Dollars in Bitcoin More

Bitcoin Developers Push Back Against Craig Wright's Claim to Billions of Dollars in Bitcoin

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  • Interesting as instructing Barristers etc. at the High Court costs very large sums of money indeed and they don't work on a "no win, no fee" basis unless a litigation fund bankrolls it.

    Someone has very deep pockets.

  • wanted the developers to put in a backdoor mechanism in bitcoin that would override the ownership of the coins, arguing it was the developers "fiduciary duty" to assist him.

    is that even possible?

    • under the laws for commoditys?

    • Re: (Score:2)

      by gavron ( 1300111 )

      wanted the developers to put in a backdoor mechanism in bitcoin that would override the ownership of the coins, arguing it was the developers "fiduciary duty" to assist him.

      is that even possible?

      If you're asking if it's technically possible, yes, it is. Just like Thompson's compiler, you have to trust the system because when it becomes untrusted you don't own what you think you own. https://www.cs.cmu.edu/~rdrile... [cmu.edu]

      • For it to be possible, more than half the network would have to agree, which they won't.

        • Re: (Score:2)

          by 1s44c ( 552956 )

          More than half the mining power. But if technically implemented this would cause a hard fork creating a new craig-is-god fork which with probably zero valued coins.

        • Not quite. He asked Bitcoin developers to change code on how Bitcoin works so specific coins are treated differently than the other tens of millions of coins. Then everyone who uses Bitcoin has agree to upload and use the new code. Now since the code is open source, it could be done; however, even if he could convince developers to do that, I think the Bitcoin community would reject any of these changes.

    • It would need every miner to accept the transaction, which would be unique on the ledger, otherwise a fork would occur.

      So, in theory yes, in practicality, getting all those miners to agree, across dozens of countries and legal jurisdictions Fuck no.

      • No, Wright asked that the underlying code that Bitcoin uses be changed. That would require acceptance of the Bitcoin community to accept these code changes. Most likely they will not. Since the code is open source, Wright can fork the code (as he has already done). The lawsuit is about legally forcing the main branch to accept the fork's changes which they already rejected.

      • Re: (Score:1)

        by otaci ( 789634 )
        There's only a couple of major miners. 5? 3? And they're large companies, with millions of dollars of assets (mining equipment). There's a hell of a lot less miners than there are banks, and banks are compelled to do stuff all the time.
    • It would be a hard fork, causing a split in the network. It's highly likely no one would mine the fork with the ownership change, nor would anyone run nodes on that fork. So, he could get the coins on that chain, but they would be essentially worthless.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Why wouldn't it be?

    • Re: (Score:1)

      by zibbe ( 686487 )
      Not really. And even if it was a UK ruling would not be enough. He also started his own bitcoin copy called Bitcoin SV and one of the defendants in the lawsuit is the Bitcoin SV Association that he controls. Which would want nothing more than Craig to win since on BitcoinSV it is possible. At current prices it would give him about $3.3M + any price increase because of the win.

  • Craig Wright's house (Score:3, Interesting)

    by gavron ( 1300111 ) on Tuesday August 22, 2023 @09:06PM (#63789296)

    Craig Wright should claims he owns his house because of some "deed of trust" or "note" or something.

    I want the legal system to change what that deed means so when it says "Owned by Craig Wright" just rewrite it to "NOT owned by Craig Wright."
    It's not fraud if the whole system says "this is not the way it was, and that's just the way it's going to be."

    That's the problem with fraudsters, conmen, and election-deniers. They just keep going and going and going. A "setback" just means try it again two years later but use different hand gestures. https://www.youtube.com/watch?... [youtube.com]

    • That's the problem with fraudsters, conmen, and election-deniers. They just keep going and going and going. A "setback" just means try it again two years later but use different hand gestures.

      You are so right [politico.com].

  • Tulip Trading (Score:4, Insightful)

    by Ogive17 ( 691899 ) on Tuesday August 22, 2023 @09:26PM (#63789332)
    When I saw this was the name of his company, it immediately sounded like a farce meant to mock crypto currency.

    Maybe this is all simply a way of discrediting the entire industry?

  • In other news (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Tuesday August 22, 2023 @09:42PM (#63789354)
    It appears possible that 12 programmers have enough control of the Bitcoin system that they could override the blockchain system and a sign ownership of coins to whoever hearts desire. But it's totes decentralized.

    Seriously is this guy just a lunatic or can those 12 programmers really do what he's asking them to?

    • It's already been done at least once.

      Somebody took advantage of a glitch in the system at a crypto company, and took a bunch of Bitcoin out, they were not entitled to. The developers, took their money back, since they own in the code, they were able to do it...

      • Re: In other news (Score:5, Interesting)

        by TheRealMindChild ( 743925 ) on Tuesday August 22, 2023 @10:07PM (#63789390) Homepage Journal

        This is nothing like that. At all. That was a glitch in the system that the entire network agreed upon to run a fix for. It benefited the health of the network and its users to fix it.

        Absolutely no one would run a node with code to give Craig Wright any Bitcoins he claims are his. It benefits no one but that conman and compromises the inegrity of the Bitcoin network. And there is alternative software to run a node other than Bitcoin Core.

        The network majority has to agree to any changes made. It is a feature of the system. That seems to be a big page most people commenting are missing here (or ignoring)

        • If the entire network has to agree to give him those coins what good does it do for him to sue those programmers? I guess the bottom line question is can those programmers change the code that runs the Bitcoin those to give him those coins or not? Because if they can then Bitcoin is fundamentally broken. You have 12 people that anyone can put a little pressure on and the entire network collapses. For something that's worth hundreds of billions of dollars that's insane.

          To be fair I don't understand the n

          • Re: (Score:2)

            by danda ( 11343 )

            Any programmer could submit a pull-request to implement the proposed changes.

            Almost guaranteed it would be rejected by the other developers. However, even if somehow they all agreed to accept it and that code got into an "official" release of bitcoin-core, the entire community would need to upgrade to it, creating a hard-fork in the process.

            This would be so hugely controversial that it is inconceivable a majority of the network would upgrade.

            Craig Wright knows this. It is unclear what his true motivati

            • Craig Wright knows this. It is unclear what his true motivations are. He's a weird guy.

              His motivation is to fool courts to award him coins therefore money that were never his. Remember that Wright owes $100M in the Kleiman case based on his stipulations to that court that he owned millions of coins. Many people like me doubt he actually owns that many coins. At today's Bitcoin price, he needs to sell about 3770 coin to pay off that case. Otherwise he would have to default or admit to the court he lied about owning those other coins.

            • Craig Wright knows this. It is unclear what his true motivations are. He's a weird guy.

              He might not actually know it.

      • This is false. No bitcoin transaction has ever been "reversed" or "charged back". Ever. You need to include citations if you are going to make such an absurd claim.

        The most well known crypto to have done something like this is ethereum, most notably after the first DOA release [arstechnica.com], but there have been other events as well.

        /. will never stop being salty about crypto

      • Re: (Score:2)

        by 1s44c ( 552956 )

        I'm pretty sure that never happened. I think you are thinking of the ETH DAO reversal.

    • Re:In other news (Score:5, Informative)

      by FuzzMaster ( 596994 ) on Tuesday August 22, 2023 @10:33PM (#63789440)
      He could get what he's asking for, but it would cause a hard fork. The coins with the redirected ownership would be on a chain that no on uses nor mines, and the coins on that chain would be worthless.
      • I don't think they'd be worthless even in a hard fork. Some people are going to follow the old chain one way or another and what he has is worth so much he would dominate that chain. He may not walk away with billions and billions but probably at least millions and millions

        • He already has his own project where this ownership model is implemented. No exchanges carry the coin and the only ones trading it are his financial backers who are just manipulating the price to keep it at about 0.1% of bitcoin. The miners and nodes are essentially all owned by a single entity, as well.

          The backers who are funding his scam lawsuits would be the only ones to pay for his faketoshi coins. They really should just end the lawsuits and pay him directly because they have already lost quite a lot

      • Re: (Score:1)

        by otaci ( 789634 )
        Really? If we assume that the "redirected ownership" is backed by a court order, which chain would law-abiding businesses follow? Like Coinbase, Greyscale Trust, the government itself with its seized coins, etc, etc.

        Who determines the value of the coins on a chain? The businesses that exchange them for dollars, goods, services, or the hobbyists at home?

        Could the 3 majority miners be compelled to implement the "redirection"? What would happen to the chain if there were no large miners?

        • Why would anyone outside the UK participate in this fraud? There aren't any major miners in the UK, AFAIK, and miners don't validate the rules of the chain. That's up to the nodes as proven in 2017 with the block size wars.

          A major miner indicated a few years ago it was going to report on OFAC-compliant blocks. The idea was quickly scuttled as a result of the backlash, so that's not likely to happen in the future.

          If any miner, big or small, mined one of the blocks for the new chain that was not compliant w

          • Re: (Score:1)

            by otaci ( 789634 )
            Miners dont validate the rules of the chain? Are you sure?

            • Yes. They produce a block based on the latest validated state of the chain and send it to the network for validation and commitment to the chain. They can and do use their own algorithm to do it because that is a potential competitive advantage, but If the block fails the validation in the nodes, they will reject it and it won't propagate to other nodes. So, the miners have to produce blocks that conform to the consensus rules running on the existing network of nodes or they won't get the block reward (subs

        • A court order? Well, for starters, what court in what jurisdiction? Because anyone outside that jurisdiction can tell that court to go pound sand.

    • Bitcoin IS decentralized. All blocks in the blockchain (and transactions in a block) have to be verified by miners. There are rules for the blocks (for example, the block cannot be above a certain size, hash has to be SHA256 and follow the requirements based on difficulty etc).

      You can modify the software to accept different blocks or transactions. However, those blocks would be incompatible with the old version of the software, so the miners who run the old version will not include those blocks/transactions

  • Start by not calling him Dr.
  • The very idea of block chain is so that no one can dispute the ownership. Either you have it or you don't. If you lose your key that's your problem. This guy 100% did not create bitcoin.

  • Not a fiat currency? (Score:3)

    by whoever57 ( 658626 ) on Tuesday August 22, 2023 @10:29PM (#63789434) Journal

    So the claimed "inventor" of a decentralized currency want to get rich by a fiat transfer of value to him?

    If this goes though, I wonder how many people will abandon Bitcoin, since they will have proved that it does not live up to its claims of decentralization, security and anonymity.

    • They can't be transferred to him without a hard fork. To be certain, everyone would abandon the fork that had the ownership reassignment, but there would still be a chain where the coins were not reassigned.

      • Re: (Score:2)

        by vbdasc ( 146051 )

        but there would still be a chain where the coins were not reassigned.

        But if the court decides in favor of this man, then such a chain could be declared illegal, and exchanges trading with it could face legal troubles, further litigation etc.

        • I really see no reason why anyone outside of the UK would care. Even within the UK, no one who understands bitcoin and its ethos will participate in validating the faketoshi scam.

        • How would a court declare a future branch illegal? A court may be able to legally order this branch to change code, but a court cannot force future branches to do the same. For example in a legal dispute with my neighbor, a court could decide my fence is on their property and order me to move the fence back one meter (3ft). If I sell the property and move far away from my neighbor, the court cannot order me to move the fence on my new property back one meter.

  • If Wright gets his way, all open source development would be at risk of fiduciary liability.

    Banking systems running on linux? The SCO v. IBM case pales in comparison for the legal ramifications this one might cause.

  • If I understand correctly, that means there's an address that owns 111,000 bitcoins, and that no one else is claiming ownership of it, or simply transferring the coins to a different address. I could understand a few blocks being mined and not claimed, but 111,000?

    Assuming they don't belong to the alleged fraudster, does that mean those coins have been lost entirely?

    • Correct, they are lost, presumably, forever.

      Since you are interested, last I checked, the total number of "lost" (unrecoverable private keys) coins is around 1 million.

      • How do you identify bitcoins that have an unrecoverable private key?

        • Re: (Score:2)

          by slazzy ( 864185 )
          That's impossible. You'd never know if someone has a private key buried under their garage...

        • It's just coins that haven't moved in a while.

          The oldest ones (pay to public key) might be vulnerable to quantum factoring in the practical future.

          Newer pay to script hash keys are fine.

          Even if an ancient society owns some coin they should move them at some point.

        • There are only three ways:

          • - keep a database of all publicly verified lost coins. multiple companies have already done this. if you browse the bitcointalk forums, you can find several lots over 100k coins that were completely lost.
          • - some other projects required that bitcoin users send their coins to addresses that can not be made from any key, there by "proof of destruction" as tied to the issuance of a coin on another blockchain. Those events alone also add up to several hundred thousands that are provabl
    • Not necessarily. Given Wright’s history of dishonesty, the 111,000 coins could have been owned my multiple wallets for a long time. Remember in his Florida trial involving an unknown bonded courier, Wright claimed to own coins to which one owner signed a message stating Wright was a liar after the coins address were revealed to the public.
    • The real Satoshi Nakamoto has 1.1 million bitcoins [banklesstimes.com], and has never sold a single one.
  • So why is he still given this much attention by the media?
    • For our entertainment. Same with the attention given to the Sussexes, and the new Snow non-White woke shit storm.
    • I, for one, hope he gets as much media attention as possible detailing his history of dishonesty and the many legal battles he has lost.

  • You have after all repeatedly claimed to have invented bitcoin. Why do you need developers?

  • This fellow seems to be utterly shameless.
  • According to the filing from the developers,
    Wright's claims:
    1. He owns coins associated with two addresses abbreviated as "1Feex" and "12ib7"
    2. He acquired all coins from the 1Feex address using a phone transaction in February 2011 using the Russian exchange WMIRK.
    3. He does not state how he acquired the 12ib7 coins.
    4. Coins from both addresses were stolen from him in the February 2020 Mt Gox hack. (Coins were stolen by hackers).
    5. The private keys of the coins were deleted along with other cryptographic information st
    • Just on this point:
      The "PO" metadata creation and modification date and time are in the UTC+10 time zone. If the PO had been created in February 2011, the correct date and time would be UTC+11 time zone.

      Was Craig located in Brisbane (where he comes from, according to Wikipedia) or Sydney at this time? Because if he was in Brisbane then it would indeed be UTC+10 because Queensland does not have DST.

  • So this guy is smart enough to invent Bitcoin, but not smart enough to avoid losing billions of dollars? Hmmm.

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