The Kleiman v Wright civil trial has been interesting to watch from the sidelines, with up to half of 1.1 million Bitcoin at stake, which are now worth about US$65 billion.
Judge Beth Bloom has said that the trial will be over by Thanksgiving, and it seems that her goal might come to a realization as the defense rested their case Monday, Day 14 of the so-called trial of the century.
Closing arguments will be held on Day 15, and the jury will be left to deliberate their decision. But before that, here is a quick summary of the important points of the case.
The Plaintiff’s Allegations
Ira Kleiman, representing his brother David Kleiman’s estate and W&K Info Defense Research, LLC, is the plaintiff in the case. First of his allegations is that David Kleiman, who was a computer forensics expert, was in a partnership with computer scientist Craig Wright in writing the Bitcoin white paper under the pseudonym Satoshi Nakamoto.
Second, Wright and David Kleiman were in a business partnership that mined the 1.1 million Satoshi coins through the entity W&K Info Defense Research, LLC. And third, Wright fraudulently transferred at least 573,500 coins from David Kleiman to himself.
The Defense’s Arguments
The crux of the defense’s argument lies in lack of evidence and further proof that Wright was the lone person behind the pseudonym Satoshi Nakamoto.
First, there is no written agreement in the form of a legal business document or even a casual email correspondence of a partnership between Wright and David Kleiman in co-writing the Bitcoin white paper and mining the 1.1 million Bitcoin together.
Second, W&K Info Defense Research, LLC was a firm that did not mine Bitcoin, and in fact, was established in 2011—years after the Bitcoin white paper was published and more than a year after the early mining of the Satoshi coins were said to have occurred, which was sometime in 2009 to 2010.
The Trial So Far
The past 13 days of the historic Bitcoin creator trial have been a rollercoaster of accusations, testimonies and pieces of evidence presented at court. It must be noted that because David Kleiman died in April 2013 and any piece of evidence he may have left behind could definitively prove the plaintiff’s allegations had been erased by Ira Kleiman himself.
As a computer forensics expert, it is highly likely—if not a certainty—that if David Kleiman co-wrote the Bitcoin white paper and mined Bitcoin that he would have some kind of evidence stored on his cell phone, laptop and hard drives.
However, Ira Kleiman has given away his brother’s cell phone, reformatted the laptop for Ira Kleiman’s wife to use, and erased and overwritten the over 10 hard and thumb drives that were placed in his possession after David Kleiman died. And Ira Kleiman’s action is to the detriment of his own case.
Furthermore, Ira Kleiman’s testimony has been riddled with holes that the defense has exposed. First, Ira Kleiman said under oath that David Kleiman had spoken to him in Thanksgiving 2009 about how the latter was “creating his own money” and working on a project that is supposedly “bigger than Facebook.”
According to Ira Kleiman, he distinctly remembered David Kleiman allegedly even drawing the “B” logo with a line or two going through it. However, the logo of Bitcoin during that time was a gold coin with a “BC” on it. The logo that Ira Kleiman described his brother drew did not come into existence until 2010. And it was not related to being Satoshi Nakamoto at all, as the one who suggested the change to the “B” logo was a Bitcoin community user with the handle “newliberty.”
Second, Ira Kleiman has claimed that David Kleiman had talked about creating Bitcoin with two of David Kleiman’s friends, Patrick Paige and Kimon Andreou. But Paige and Andreou have testified in court that David Kleiman had not mentioned Bitcoin to them at all. In fact, all of David Kleiman’s friends have not heard anything about David Kleiman related to Bitcoin from the man himself.
While there was a document stating that a transfer of 573,500 Bitcoin from David Kleiman to Wright did occur, it was during the time when the Australian Taxation Office (ATO) were allegedly holding a grudge against Wright and targeting him with over 200 investigations.
“Dave helped me act as a front, a sham as the ATO called it. So, it looked like he ran all my companies… the Australian Taxation office almost bankrupt me and became the owner of Bitcoin’s IP,” Wright said during his witness testimony for the plaintiff.
According to Wright, he asked for David Kleiman’s help in transferring 573,500 Bitcoin to the latter so the ATO could not touch it, which the latter later returned to Wright. Although there is no proof of such an agreement between Wright and David Kleiman, the fact that David Kleiman, a former police officer who would have known whether he was being scammed or not, had not laid claim to the coins in question while he was still alive.
David Kleiman and Wright maintained a good relationship until the latter’s death and David Kleiman only had nice things to say about Wright in emails presented in court—something that did not suggest any kind of animosity if Wright had indeed steal the 573,500 Bitcoin from David Kleiman, as the plaintiff is alleging.
Due to this lack of hard evidence, the plaintiff has then sought to prove that Wright had forged documents before and was a man not to be trusted in the hopes of discrediting his testimony to the jury. All of these allegations have been denied by Wright.
Wright’s Testimony for the Defense
After Dr. Ami Klin, a renowned doctor specializing in autism, has finished his testimony about diagnosing Wright with Asperger’s syndrome, which the doctor has defended against cross-examination, the defense called in Wright to testify for the defense.
The defense’s examination begins by questioning Wright about his life as a child, establishing his grandfather’s influence on him that allowed him to become fascinated with Japanese culture, which later on led him to create the pseudonym Satoshi Nakamoto.
Then, a crucial piece of evidence is presented, minutes of a meeting between Wright and a certain Allan Granger from international accounting firm BDO, formerly Binder Dijker Otte. According to Wright, the meeting was all about him “proposing something that later became Bitcoin,” a “P2P e-cash” that was later on rejected by BDO.
Wright further states that he had originally gotten the idea of Bitcoin in 1998, when he was still working for online casino Lasseters. The concept was that the casino would have tokens that can be used within and outside of the casino—a precursor to digital cash that was the original vision for Bitcoin.
Wright further stated that the Bitcoin white paper was originally 60 pages, and then it was slimmed down in the second draft and further became shorter in the third draft. Wright said under oath that it was the third draft that he gave Ira Kleiman to edit.
A 2008 email that was presented by the plaintiff about Wright asking for help from David Kleiman in editing “bit cash” was then brought back up again. The email has been one of the 40 emails that the plaintiff is alleging had been forged by Wright.
This particular email, which was from Ira Kleiman who testified to still having access to David Kleiman’s email until this day, and others that have been claimed to be forgeries or had been tampered with, have been sent using a common IP address, which was sent from the email address [email protected]
According to Wright’s testimony today, the particular domain rcbjr.org was actually a family domain, stands for Ramona, who is Craig’s wife, Craig and the initials of their three children. In 2008, Wright was still married to his ex-wife Lynn Wright. Wright had not met Ramona until 2010, and they did not have a romantic relationship until 2011.
So, it could not have been possible for Wright to have used this email address in 2008. This very compelling piece of information has now redirected doubt about who actually forged the emails. Was it Wright, who did not yet have access to this email address that held the initials of his future family members, or Ira Kleiman, who had admitted to having over 30 email addresses and who emails himself a birthday greeting from David Kleiman’s email address on a yearly basis?
The plaintiff’s cross-examination points out the inconsistencies with Wright’s testimony about how Wright before stated that he gave the 60-page first draft to David Kleiman and not the third and how Wright previously stated mining Bitcoin from several locations, while in an earlier deposition, Wright said he mined Bitcoin from only one location.
The defense has rested, and all that remains are the closing arguments. Who the jury will side with on this case will be known most probably before Thanksgiving.