The civil suit brought by Ira Kleiman against Dr. Craig Wright hinges on the latterâs ownership of the largest untouched stash of BTC tokens in existence. The suit, which was launched nearly four years ago, finally got underway in the Satoshi trial in Florida on November 1 and is expected to conclude sometime around the Thanksgiving holiday later this month.
Ira has alleged that his late brother Dave was Wrightâs partner in many endeavors, including the creation of Bitcoin, and thus Daveâs estate has a claim on the 1.1 million BTC tokens Wright is said to possess. Wright, the real-world figure behind the Satoshi Nakamoto pseudonym credited with authoring the Bitcoin white paper in 2008, maintains that while Dave helped him edit the white paper, Dave didnât play any other significant role in Bitcoinâs development.
Given the length of time itâs taken to come to trial, the legal costs for both parties will be enormous, but this shouldnât pose a problem for the defendant (assuming Wright has access to the roughly $65 billion or so that the 1.1million BTC are currently worth). Ira has no such reserves and is thus relying on âlitigation financing assistanceâ provided by an offshoot of third-party litigation funding outfit Parabellum Capital.
Preparing for war
As previously documented on this site, Parabellum tends to raise capital on an as-needed basis but the individual sources of this capital arenât a matter of public record. Itâs also a fact that Ira was emailing undisclosed parties with âan interest in the Bitcoin spaceâ as far back as 2016, promising them âa percentage of a successful judgmentâ in exchange for funds that would allow Ira to pursue his claim against Wright.
Thereâs no getting blood from a stone, so the parties that anted up to fund Parabellumâs pursuit of Wrightâs billions would have to believe that Wright indeed has access to the 1.1 million BTC. At first glance, that would seem to eliminate many of the more notable individuals/entities with âan interest in the Bitcoin space,â as theyâve kept up a constant drumbeat of Wright-bashing since he was âoutedâ as Satoshi (with the alleged help of Ira) in Wired and Gizmodo in December 2015.
Or does it? Deep down, many of the loudest members of the Wright-is-Wrong camp know full well that Wright is Satoshi but have maintained their public façade to prevent further acceptance of Wright and the BSV blockchain protocol. BSVâs focus on infinitely scaling blocks, low transaction fees and high functionality poses an existential threat to the function-free âstore of valueâ protocols currently out there, particularly BTC.
Wrightâs opponents may have believed that taking him to court would distract him from further developing BSV or drive him into bankruptcy if he failed to find his own financial support. If that failed, at the very least the anti-Wright financial backers might still emerge sitting pretty by claiming an ill-gotten slice of the BTC that Wright mined in Bitcoinâs early days, when few were taking his creation seriously.
The usual suspects
Blockstream is a leading candidate to be a contributor to Parabellumâs âGet Craigâ fund. The companyâs âLayer 2â products for BTC whales (Liquid) and minnows (Lightning) are only needed because the BTC protocol has been hobbled to the point of futility. BSV can do everything Liquid/Lightning can do but does it on-chain, without the need for Blockstream imposing proprietary control over digital commerce.
Blockstream is a member of the Crypto Open Patent Alliance (COPA), a group that sued Wright in the U.K. High Court last April over his copyright claim on the Bitcoin white paper. Many of the suspects on this list are COPA members, which was one of the principal backers of Blockstreamâs Series B financing round in August. It appears COPA has been formed to solely antagonize Wright over his copyright claim on the Bitcoin white paperâsee their lone tweet back in April on the matter since they announced they are suing Wright.
iFinex, which operates the Bitfinex cryptocurrency exchange and the Tether (USDT) stablecoin, has spent too much time and effort pumping up BTCâs value to see it undone by BSV achieving massive enterprise adoption. The resulting decline in BTC value could result in an effective bank run as exchanges and their market makers rushed to redeem their USDT for actual cash (reserves that Tether simply doesnât possess).Â
Bitfinex was not among the exchanges that delisted BSV in a seemingly coordinated campaign aimed at diminishing Wrightâs influence. In January, iFinex CTO Paolo Ardoino tweeted that the exchange âhas leveraged traders on BSV. We canât put our own users at risk with a rushy [sic] decision.â
Those BSV-based leveraged traders on Bitfinex consistently have a 9-1 short interest, which many have interpreted as a coordinated effort to suppress the value of the BSV token. Suspicion is rampant that Tetherâs overactive money printer is assisting this downward pressure, particularly given that Ardoino has admitted that iFinex provided â300k+ in fundingâ to individuals with whom Wright is engaged in legal matters.
Another COPA member is MicroStrategy, which has been effectively transformed into a BTC-based exchange-traded fund by founder Michael Saylor, who borrowed billions of dollars to acquire over 114k BTC tokens. Saylor, who claimed last week that BTCâs value is âgoing up forever,â has explicitly compared BTC to real estate against which he can borrow actual money to accomplish real-world goals that BTC is incapable of performing. A BSV token that can be used for both everyday transactions and more complex functions would be the equivalent of Saylor finding his BTC real estate was built on toxic waste dumps and Indian burial grounds.
Digital Currency Group, the financial giant founded by Barry Silbert that controls the CoinDesk crypto news site and holds stakes in countless other BTC-based ventures (including Blockstream), stands staunchly opposed to anything that might challenge its current dominance of BTCâs public infrastructure.Â
The suspects arenât limited to the BTC camp. Ethereum founder Vitalik Buterin has been among Wrightâs most vocal critics, presumably because BSV has exposed the lie behind Ethereumâs self-proclaimed âworld computerâ ethos. Too many developers who launched products on Ethereum found that it couldnât scale to handle the required transaction volume, while the transactions Ethereum could handle came saddled with onerous fees.
In June, Buterin appeared on Lex Fridmanâs podcast, in which Buterin called Wright a troll and a scammer. This is typical for Buterin, who routinely hurls personal attacks at Wright while largely avoiding discussing the relative merits of BSV vs. Ethereum. Perhaps this is because Buterinâs repeated promises to solve Ethereumâs scaling issues have yet to result in any material change, with each new proposal falling by the wayside once developers take a look under the technical hood. Gas fees on Ethereum are still going through the roof.
By contrast, Wrightâs critics have been forced to eat their words as some of his claims regarding Bitcoinâs true capabilitiesâmassive on-chain scaling is possible, Bitcoin is Turing completeâwere ridiculed at the time only to be later proven accurate. Wright has also demonstrated insights into Bitcoinâs design that have long puzzled othersâsuch as why he used a double hashâthat buttress his claim to being Satoshi and leave critics such as Buterin looking even more desperate.
For services rendered
Ira Kleiman raised a lot of eyebrows when he was a no-show on the second day of his lawyers making their case. By some accounts, Iraâs eventual appearance on the stand showed him seemingly disinterested in the trial process, a strange approach given the stakes. That is, unless Iraâs already signed away most or even all of his stake in the verdict in exchange for an upfront payment, and now views his role simply as a mundane task heâs obligated to perform.Â
The same canât be said for those who put money into seeing Ira prevail and Wright laid low. Their names wonât appear on the docket but they have been the real plaintiffs from the start of this legal charade. Ira is just their beard, a useful idiot whose disinterest in his brotherâs welfare while Dave was still alive was more than evident by the fact that the pair hadnât seen each other for over three years when Daveâs body was discovered, despite living only a few miles apart.
This whole episode resembles Agatha Christieâs Murder on the Orient Express, in which a group of individuals conspire to murder a fellow passenger with whom all of them share a secret connection. Detective Hercule Poirot, acting in a purely unofficial capacity, exposes them all as guilty, but the one police official on the sceneâin a shocking dereliction of dutyâultimately decides to let them all go free. If thereâs any justice in the world, they wonât get away with it this time.Â
Check out all of the CoinGeek special reports on the Kleiman v Wright YouTube playlist.
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