Self-proclaimed creator of Bitcoin found to have lied by English court: Crypto Open Patent Alliance v Wright (2024)

Background

Since 2016, Dr Craig Wright, an Australian computer scientist, has been asserting intellectual property rights against numerous individuals and companies working on the development of Bitcoin and cryptocurrency technology by claiming to be Satoshi Nakamoto, the pseudonymous inventor of the Bitcoin system.

Crypto Open Patent Alliance, a non-profit cryptocurrency group with a stated aim to prevent patent hoarding and obstruction of innovation, launched a claim against Dr Wright to prove that he did not invent the Bitcoin system in Crypto Open Patent Alliance v Wright[2024] EWHC 1198 (Ch).

What were the court’s key findings?

In March 2024, and following a six-week trial, Mr Justice Mellor ruled that Dr Craig Wright is not Bitcoin creator Satoshi Nakamoto and stated that the evidence presented during the trial was overwhelming. Based on this, Mr Justice Mellor made four declarations:

1. Dr Wright is not the author of the Bitcoin White Paper;
   
2. Dr Wright is not the person who adopted or operated under the pseudonym “Satoshi Nakamoto” in the period 2008 to 2011;
   
3. Dr Wright is not the person who created the Bitcoin System; and
   
4. Dr Wright is not the author of the initial versions of the Bitcoin software.

The full written judgment was published on 20 May 2024. Mr Justice Mellor is highly critical of Dr Wright noting that he was “entirely satisfied that Dr Wright lied to the Court extensively and repeatedly”. The judgment includes a 150-page appendix setting out the forgeries submitted by Dr Wright to the court. For example, evidence shows that Dr Wright reverse-engineered the Bitcoin White Paper and adjusted the text and images to fit the layout of that paper. Mr Justice Mellor found, regarding Dr Wright’s claim, that “[a]ll his lies and forged documents were in support of his biggest lie: his claim to be Satoshi Nakamoto”.

Mr Justice Mellor also observed that the way Dr Wright conducted the proceedings is inconsistent with the attributes and behaviour one would expect Satoshi to exhibit. For example, he considers that “it is likely that the real Satoshi would never have set out to prove in litigation that he actually was Satoshi and certainly not in the way that Dr Wright attempted to do so”.

What next for Dr Wright?

The Identity Issue is also central to several other cases brought by Dr Wright, including cases alleging breach of database rights and copyrights which subsist in the Bitcoin White Paper and in the Bitcoin File Format, and passing off regarding the term ‘Bitcoin’ by crypto trading platforms. The declarations in Crypto Open Patent Alliance v Wright will likely resolve or assist in resolving these cases as well. In making the declarations, Mr Justice Mellor was minded to ensure that Dr Wright would not have any possible basis on which to threaten individual developers with allegations of copyright infringement or infringement of database rights stemming from the work done by Satoshi Nakamoto. Dr Wright, however, has expressed that he intends to appeal the decision on X.

Dr Wright is also associated with Tulip Trading Ltd v Van der Laan, with the claimant in that case being a company associated with Dr Wright which lost access to a large amount of bitcoins as a result of a hack of Dr Wright’s computer. This case was closely watched. Following a decision by the Court of Appeal, that there was a realistic argument that developers of a decentralised network may owe a duty to assist users to transfer their digital assets to safety, the case was remitted back to the High Court for a full trial. However, Tulip Trading voluntarily discontinued the case in April 2024.