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Craig Wright at center of legal fight over billions in Bitcoins

Posted:Aug 22, 2023 14:35 Category: Blockchain , Regulatory , Posted by Content Team

Bitcoin developers involved in a lawsuit with Craig Wright, who claims to be the inventor of Bitcoin, have filed a preliminary issue application with the U.K. High Court. The application aims to challenge Wright’s ownership claim of 111,000 Bitcoins allegedly stolen from the Mt. Gox exchange.

The defense attorneys argue that Wright lacks documentation proving his ownership of the missing Bitcoins and accuse him of fabricating the limited documents provided to the court. They seek to have the claim struck out as fraudulent and an abuse of process.

[We] seek to have this claim struck out on the ground that it is a fraudulent claim and an abuse of process,” said Enyo Law LLP attorney Timothy Elliss in the filing. “They seek disclosure and other case management directions to enable this threshold issue of fraud to be determined as a preliminary issue.”

If Wright were indeed the owner of the Bitcoins in question, the defense claims that he would effectively be admitting to stealing 80,000 BTC, which is worth approximately $2 billion today. The defense points out that the Bitcoins in question are believed to have originated from a well-known hack on a Japanese cryptocurrency exchange in 2014.

According to claims made by Tulip Trading Ltd., Dr. Wright acquired the Bitcoins in the 1Feex address from a Russian exchange called WMIRK in late February 2011.

However, Tulip Trading Ltd. cannot provide any information about when or how they or Dr. Wright acquired the Bitcoins in the 12ib7 address, nor can they explain the purpose of the transactions that occurred on it.

Blockchain record shows that no one has conducted any transactions with the Digital Assets in the 12ib7 address since July 2010, and the 1Feex address has remained inactive since March 2011.

Facing scrutiny

The Bitcoin Legal Defense Fund, a non-profit organization supporting Bitcoin developers in legal cases, is backing the defense of the Bitcoin Core developers targeted in Wright’s lawsuit.

Dr. Wright has a long history of fraud, forgery, and dishonesty (including in court proceedings in this jurisdiction and internationally),” reads a statement released by the organization on Monday.

“[Wright] has been shown to be a thoroughly dishonest individual, and it is the position of the [defendants] that these proceedings are an attempt by Dr. Wright, through Tulip Trading Ltd, to use the English courts as an instrument of fraud.”

The case, titled “Tulip Trading Limited v. Bitcoin Association For BSV & Others,” is ongoing, and the court will need to determine the ownership of the digital assets before proceeding further.

Neither the Bitcoin Legal Defense Fund, the Bitcoin Association for BSV, nor Tulip Trading Limited have provided a comment on the matter at this time.

Controversial figure

Amid all his controversies, Craig Wright, who claims to be the mysterious Satoshi Nakamoto, has shared his vision for the future of Bitcoin. Referencing the original Bitcoin whitepaper, Wright offered insights into the potential evolution of the pioneering cryptocurrency.

According to Wright, the next stages of Bitcoin’s development will see a shift in the roles of network participants. He envisions a scenario where specialized server farms will gradually replace individual users running network nodes with advanced hardware. This transition is expected to optimize transaction processing capabilities.

Wright believes this evolution will naturally occur as Bitcoin grows beyond its current limits. Currently, the global Bitcoin network comprises a vast network of 44,932 nodes, with the United States hosting the highest number of nodes at 30.87 percent.

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