Judge Throws The Book At Craig Wright After Months Of Fraudulent Testimony, But Will David Kleiman's Family Ever Get Any Bitcoin?

The judge presiding over the case of the estate of David Kleiman versus Craig Wright has nearly ended the case, and simultaneously thrown the book at Craig Wright after months of apparently fraudulent testimony.

First, a little background on this case. Wright and Kleiman mined Bitcoin together in the early days, around 2009-2010, and apparently amassed over 1 million Bitcoins worth in excess of $10 billion today. Apparently Wright and Kleiman had a 50/50 partnership, but after Kleiman died in 2013 his children did not receive any Bitcoin from Wright, and ultimately Wright outright refused to give Kleiman’s children anything, leading to the lawsuit and subsequent court case.

This is perhaps one of the most important cases in the history of Bitcoin, since it involves a massive amount of Bitcoin, and promised to shed some light on the early days of Bitcoin. This is especially because Craig Wright claims to be Satoshi Nakamoto, the creator of Bitcoin. During the case Craig Wright said on the stand that he is Satoshi Nakamoto, but continues to fail to present the actual evidence, which would be a signed message using the private key from the genesis block. The judge eventually had to clarify that the court is not going to rule if Craig Wright is Satoshi Nakamoto or not, since that’s not what the case is about.

The 29 page ruling by the judge reveals the convoluted, contradictory, and fraudulent testimony that evolved over the past several months. Wright claimed that Kleiman traded all of his Bitcoin and intellectual property for equity in W&K Defense Research, a company which failed, meaning Kleiman is owed nothing. Simultaneously, Wright claimed there was no partnership with Kleiman at all.

These statements were so contradictory that the judge moved on to requesting a list of Bitcoin holdings from Wright, to determine where the Bitcoin is and how much Kleiman’s estate would get. Wright stalled the court for many months on this matter, to the point that it could be considered contempt of court.

After months of refusing to produce any evidence regarding his Bitcoin holdings, Wright claimed that the Bitcoin holdings had been consolidated into the Tulip Trust, and that this trust consisted of an encrypted file that utilized Shamir’s Secret Sharing Algorithm, so that the key for the file was divided between multiple people. Wright says he cannot access the file because he does not have enough key shares, and only in January 2020 will a courier arrive with a key share needed to open the file.

The judge ruled that it was inconceivable that Wright did not have access to over $10 billion of Bitcoin, and equally inconceivable that Wright would be willing to lose the Bitcoin if the courier did not show up. Ultimately, the judge ruled that the Tulip Trust and the encrypted file does not even exist, meaning all of Wright’s testimony was a lie.

Due to this obvious contempt of court, the judge entered a default judgement that Kleiman’s estate is entitled to half of the Bitcoin and half of the intellectual property of Wright, as well as attorney’s fees.

However, Wright was very careful not to disclose any evidence regarding where the Bitcoin is, and was careful to declare that the Bitcoin is totally inaccessible. This will make it extremely difficult for the Kleiman estate to get any Bitcoin. That being said, it is possible that the court will order that Wright’s other real assets and bank accounts will be seized, but that remains to be determined in a final order that will come at some point in the future.