The nearly four-year-old civil case of Kleiman v Wright finally began its trial phase in Miami on Monday. At stake is approximately US$66 billion in Bitcoin and the true identity of the pseudonymous inventor of Bitcoin, Satoshi Nakamoto. Given the staggering amount involved, the attention on the case is fairly mild. Why?
The defendant, Craig Wright, an Australian computer scientist, claims to be Nakamoto and therefore the bearer of a rumored 1 million Bitcoins. The plaintiff, the estate of the late David Kleiman claims Kleiman was Wright’s partner in the creation of Bitcoin and therefore entitled to half. Wright had acknowledged Kleiman as his partner numerous times in the past, according to documents presented by the estate, but a few years after Kleiman’s death in 2013 Wright disavowed having ever had a business partner other than his now ex-wife.
The trial will focus on whether Wright and Kleiman had a partnership to mine Bitcoin, and therefore whether Kleiman’s estate has a right to half of the Bitcoin mined.
Geoffrey Miller, Stuyvesant P. Comfort Professor of Law, who has co-taught Digital Currency, Blockchains and the Future of Financial Services at NYU School of Law for eight years, told Forkast.News the lukewarm interest in the trial is due to the crypto community’s skepticism about Wright’s claims to be Nakamoto. In 2016, Wright claimed he would spend a portion of Satoshi’s Bitcoin, the world’s largest holding of the cryptocurrency, to prove he was Nakamoto. But he failed to execute, creating tremendous doubt in his story.
“The case is kind of a sideshow, it’s amusing,” said Miller. “I don’t know what the judge thinks but the chance that it will have any major impact on the crypto world is fairly low.”
Nevertheless, Miller has a few takeaways to consider as the case unwinds in federal civil court.
- If the money were held in a conventional asset, there would never have been a case at all, because ownership would be clear. In this case, Wright claims to own the Bitcoin, and his ownership has not been disproven yet. “Satoshi Nakamoto has the largest personal fortune of cryptocurrency in the world, 1 million Bitcoin. That’s a spectacular amount of money, but Satoshi has never spent any of it,” said Miller. “Whoever is the owner of the Bitcoin is whoever has the private key,” he added.
- Even if Kleiman’s estate wins the case, there may be no money to gain because Wright may have no access to Satoshi’s Bitcoins. The case is expected to be three weeks long, which shows the allure of US$66 billion, even if the chances are extremely slim the money even exists. “Someone has enough money to spend on the low probability that there is an enormous amount of money to win,” Miller said.
- Finally, the participation of lawyers from prominent firms is indicative of growing interest from the legal community to develop cryptocurrency practices. “There’s a gold rush of lawyers into the crypto space and it doesn’t hurt to have your name associated with a prominent case,” Miller said. Kleiman’s estate and David’s brother Ira Kleiman are represented by ex-Boies Schiller Flexner partner Kyle Roche of Roche Freedman, a Miami and New York-based firm. Wright is represented by Amanda McGovern of Miami firm Rivero Mestre.