A jury in the US District Court for the Southern District of Florida ruled that friends David Kleiman and Craig Wright never formalized a partnership to develop the original Bitcoin protocol and mine some 1.1 million bitcoin. As a result, jurors said, there is insufficient legal grounds to demand that the two men split half of the purported billions of dollars worth of bitcoin.
That is, of course, if Craig Wright even controls those bitcoin — which is highly doubtful.
The estate of David Kleiman appealed the jury’s decision that no partnership existed to the US 11th Circuit Appellate Court. However, 11th Circuit judges affirmed the Floridian jury ruling.
- David Kleiman passed away in 2013.
- His estate is managed by David’s surviving brother Ira Kleiman, who argued that Wright transferred intellectual property from W&K Info Defense Research LLC.
- W&K was co-founded by Craig Wright and Kleiman, to organizations controlled by Wright in a scheme to steal up to 1.1 million bitcoin.
The current ownership of W&K Info Defense Research LLC is a matter of litigated debate and involves various trusts as well as two of Wright’s marriage partners, Ramona and ex-wife Lynn Wright.
Craig Wright dubiously claims to be Satoshi Nakamoto, the inventor of Bitcoin. For years, he worked closely with Calvin Ayre, the primary backer of a forked offshoot of Bitcoin, BSV.
Satoshi Nakamoto — whoever they are — mined approximately 1.125 million bitcoin while developing the Bitcoin system from 2009 to 2011. Nakamoto used dozens of computers to provide processing power for the fledgling protocol.
Final verdict: No 1.1 million BTC Kleiman-Wright partnership
According to the US District Court for the Southern District of Florida and affirmed by the US 11th Circuit Appellate Court, David Kleiman and Craig Wright did not form a legally binding partnership that shares ownership of over 1.1 million bitcoin.
The 11th Circuit judges declined three appeals brought by Kleiman’s estate.
First, Ira Kleiman argued that the Florida jury was given erroneous instructions in its appeal. Instructions should have been based on Florida law, he claimed, as it existed when the partnership was formed.
The 11th Circuit didn’t budge. The three-judge panel felt that Kleiman’s estate had failed to demonstrate that an asset-sharing partnership existed, even under a previous law passed in 1972.
Second, the panel rejected the estate’s claim that Craig Wright’s attorneys violated an order to avoid references at trial to the sibling relationship between David and Ira Kleiman, saying that the estate should have objected in real-time, at the trial, when counsel mentioned their relationship. Because the estate did not object then, it cannot object now.
Third, the 11th Circuit judges ruled that presiding judge Beth Bloom had not erred in vacating “deemed facts” sanctions. This is true even though Wright had been found liable for a “willful and bad faith pattern of obstructive behavior.”
More to come from the ever-litigious Craig Wright
Craig Wright has made a career out of suing people. In various jurisdictions around the world, he has filed lawsuits against members of the Bitcoin community, including Peter McCormack, Hodlonaut, Cøbra, Roger Ver, Bitcoin Core maintainers like Wladimir van der Laan, and many others.
All Wright’s lawsuits involve his claim to be Bitcoin’s pseudonymous creator, Satoshi Nakamoto. Wright initially tried to prove he controlled Nakamoto’s wallets, even temporarily fooling media reporters and Bitcoin’s ex-lead maintainer Gavin Andressen.
Since then, Wright has filed numerous court cases worldwide in a bid to prove his claims and silence critics through claims of libel. For example, he filed a copyright suit for the Bitcoin whitepaper and attempted to force the anonymous owner of the Bitcoin.org domain, Cøbra, to take it down. A similar IP lawsuit sued most of the Bitcoin Core maintainers. Cobra refused; the original whitepaper is still hosted on Bitcoin.org.
Earlier, he lost a libel suit against Roger Ver. Wright has also sued Vitalik Buterin — but later gave up on the case, giving the excuse that Buterin essentially stood up for himself by exploiting a UK rule meant to prevent “forum shopping.”
Wright is also suing Bitcoin developers to “recover” Satoshi Nakamoto’s bitcoin by forcing them to change the code of Bitcoin’s Core client. So far, no luck. No Bitcoin Core maintainers have changed the code in accordance with Wright’s wishes.
The latest Kleiman lawsuit depended on the truth of Wright’s claim to the pseudonym of Satoshi Nakamoto and the existence of a former partnership between David Kleiman and Craig Wright. An appellate court for the 11th Circuit rejected the Kleiman estate’s appeal on the grounds that it could not prove that a partnership existed.
More Craig Wright litigation will continue, as always, especially regarding the ownership structure of W&K Info Defense Research LLC.