Craig Wright Is Not Bitcoin Creator Satoshi Nakamoto, Judge Declares
A surprisingly fast ruling at the end of a six-week trial in the UK High Court ends Craig Wright's campaign to be recognized as the inventor of Bitcoin.
Overwhelming evidence” shows Craig Wright did not create bitcoin, judge says
Craig Wright is not Satoshi Nakamoto, the pseudonymous creator of the Bitcoin network, according to Judge James Mellor's ruling in the United Kingdom on March 14, reported BitMEX Research.
Closing arguments began in London on March 12 in the lawsuit brought by the Crypto Open Patent Alliance (COPA) lawsuit against Wright, an Australian computer scientist who claimed to be Nakamoto since 2016.
COPA was seeking injunctive relief to prevent Wright from further claiming to be Nakamoto. Wright has been accused of massive document forgery for supporting his claim of being the pseudonymous Bitcoin founder. According to COPA’s closing submission:
“Dr. Wright has been shown to have lied on an extraordinary scale. […] He has invented an entire biographical history, producing one tranche after another of forged documents to support it.”
The trial began on Feb. 5. Wright had offered to settle the case out of court on Jan. 24, but COPA declined.
Judge rules Craig Wright is not Satoshi Nakamoto: Report
Overwhelming evidence” shows Craig Wright did not create bitcoin, judge says
Judge rules computer scientist not Bitcoin inventor
ATO papers allege claimed Bitcoin ‘creator’ doctored documents
Self-claimed bitcoin inventor Craig Wright allegedly made more than $3 million in false research and development tax claims for his technology companies before leaving Australia in 2015.
The Tax Office audited and rejected $3.3 million in R&D tax claims and $2.4 million in other deductions in 2013 and 2014 and issued a $2 million penalty to one of his firms, documents show.
Brisbane-born Dr Wright, who “emphatically denied” the ATO’s allegations of false documents, was dealt a blow on Friday by a British court, which ruled he was not bitcoin inventor Satoshi Nakamoto.
In a verbal judgment at the end of a six-week trial, Justice James Mellor threw Dr Wright’s claims out, declaring the “evidence is overwhelming” that his claims to be the inventor of bitcoin were false.
The ATO documents shed some light on why the agency raided Dr Wright’s former home on Sydney’s North Shore in December 2015.
The papers were buried among thousands submitted to a US lawsuit between Dr Wright and Ira Kleiman, the brother of a deceased business partner, David Kleiman.
The fight was over 1.1 million bitcoin, now worth almost $120 billion, which is believed to have been mined by Satoshi and owned by him. The cache has been untouched since soon after the creation of the cryptocurrency. Ira Kleiman was claiming 550 million bitcoin because, he argued, his brother and Dr Wright had created it together.
Dr Wright was ultimately successful, with the court ruling Kleiman’s estate was not entitled to half the Satoshi stash. However, Satoshi’s identity was never proven at the trial. If Dr Wright had lost, he would have needed to prove he had the bitcoin fortune by transferring half to the Kleimans.
Three now defunct firms
The ATO also alleged forgery in various claims put to the Tax Office by three firms controlled by Dr Wright at the time. The firms claimed to work on automation, learning and cryptocurrency software development.
All three firms are now defunct and were wound up by the ATO in 2017. While Dr Wright denies the ATO allegations, a spokeswoman for him said the wind up of the companies was not contested at the time.
Hours before Dr Wright’s home was raided by the Australian Federal Police and ATO in December 2015, US technology publications Gizmodo and Wiredpublished stories suggesting Mr Wright could be Satoshi Nakamoto, the mystery author of the 2008 white paper behind bitcoin.
“We consider the taxpayer made false or misleading statements,” the ATO said in a penalty and interest paper for Wright’s company C01N, relating to the 2012-13 financial year and issued in 2016.
The ‘controlling mind’
Dr Wright, who claims to have more than 200 qualifications and has been involved with companies making R&D claims since 2001, was the “controlling mind” of C01N when the tax return was lodged, the document states.
“We consider the statements arose from the taxpayer’s intentional disregard of taxation law,” the ATO said. “We also consider that the taxpayer did not have a reasonably arguable position.”
Material presented to the ATO to prove the existence and use of a so-called C01N supercomputer “appears to have been manipulated in an attempt to mislead the ATO into accepting that the taxpayer had access to a supercomputer with the specifications it claims to have acquired,” the tax office noted in a March 2016 C01N position paper following an attempt to $2.2 million in R&D offsets in the 12 months to June 30, 2013.
A public relations firm representing him initially accused AFR Weekend of basing this story on Reddit posts. But a second PR firm later asked to retract the statement.
“[Dr Wright] acknowledges your questions, which, you should be aware, contain a series of false and defamatory statements,” the PR spokeswoman said in a statement. “For your understanding, there is no criminal investigation on Dr Wright or the companies in Australia.”
AFR Weekend asked Dr Wright’s spokeswoman in September 2023 to explain an email sent by an ATO investigator on June 21, 2018, to Kleiman’s lawyers which noted she was “currently conducting a criminal investigation relating to Craig Steven WRIGHT”.
“To be clear, all of the ATO allegations set out in your questions are emphatically denied. So far as any criminal investigation flowing from the allegations is concerned, it is public knowledge that the ATO executed search warrants in 2015,” the spokeswoman said.
The ATO said it could not comment on individual people or companies due to confidentiality laws. However, the ATO, in the C01N documents, questioned the authenticity of emails, texts and other messages used to make R&D claims.
“The taxpayer has also presented a number of emails to the ATO that the ATO has examined and found to be false or doctored, one of which featured a purported ‘forensic analysis’ prepared by the taxpayer in an attempt to show that the doctored email was legitimate,” the ATO paper said.
“This has led us to question the veracity and genuineness of other emails and electronic communications provided by the taxpayer.”
Dr Wright’s spokeswoman said as far as they were aware no prosecution has commenced since the ATO raid “notwithstanding the plethora of material seized by the ATO during the execution of the warrants and the significant time that has now passed.
“The ATO has infinite resources and has had ample opportunity to pursue the allegations in the intervening period but has not done so. We have no further comments.”
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Max Mason covers insolvency, courts, regulation, financial crime, cybercrime and corporate wrongdoing. A Walkley Award winner, Max's journalism has also received awards from the National Press Club of Australia, the Kennedy Awards and Citibank. Connect with Max on Twitter. Email Max at max.mason@afr.com
Andrew Burke is the editor of AFR Weekend, based in the Sydney newsroom. He has worked at the Financial Times in London, the South China Morning Post in Hong Kong and reported from across Asia and the Middle East. Connect with Andrew on Twitter. Email Andrew at aburke@afr.com
