Forbes Investigates Craig Wright: Whether he is Satoshi Nakamoto is no longer as important.
Original author: Michael del Castillo
Original translation: 0x11, Foresight News
In the fall of 2012, long before most people had heard of Craig Wright, the Australian computer scientist quietly submitted his first patent related to the newly created Bitcoin, when the value of a Bitcoin was only $10. The following year, a trading platform called Coinbase raised $5 million with the goal of "making Bitcoin more accessible to ordinary consumers." Another year later, in 2014, co-founder of Bitcoin Magazine, Vitalik Buterin, published a paper describing a new type of blockchain called Ethereum, and praised Bitcoin's pseudonymous creator Satoshi Nakamoto for his breakthroughs in cryptography.
While the emerging cryptocurrency industry was focused on the licensing of the Bitcoin code (allowing anyone to use the software under copyright law), Wright was already seeking to protect this new technology with patents. By December 2015, when Wright was identified as a candidate for being Satoshi Nakamoto by two news organizations, he had already filed two patents and was the chief scientist of a Swiss company called nChain, which had applied for three patents.
Until recently, there has been intense debate over whether the 52-year-old Wright is indeed Nakamoto, the person who holds cryptocurrencies worth $3.3 billion in his Bitcoin wallet (with the current price of Bitcoin being around $30,000), and whose blockchain invention allows anyone in the world to send cryptocurrency to others without relying on banks. According to data from Pitchbook, digital currencies have helped entrepreneurs raise $89 billion. Next year, Wright will go to the UK High Court to prove that he is the inventor of Bitcoin.
"I created Bitcoin," Wright told Forbes in his office in London.
But the focus of this debate could soon shift. Regardless of whether Wright can prove he created Bitcoin, if he can assert control over his 800 granted patents and 3,000 pending patents across 46 jurisdictions according to his own terms, he could soon amass great wealth from the trend of building widespread blockchain applications. This would impact everything from the $1 trillion cryptocurrency market to some of the world's largest companies. What is concerning is that Wright is employing legal strategies to set a precedent for releasing software under permissive copyright rules (open source), including the widely used open source JavaScript framework, React, developed by Meta, Microsoft's Visual Studio used for code editing, and Linux operating system by Linus Torvalds, which powers 40% of the internet.
"I don't like Silicon Valley, they are the cancer of the world," Wright said. "They can steal whatever they want." He paused, seemingly reconsidering his words, and added, "They are the malignant hemorrhoids on the world's buttocks."
Dr. Craig Steven Wright was born in Brisbane, Australia in 1970. His mother worked with punch cards for early computers, and his father served in the Vietnam War. Wright is a well-educated individual, with over 20 degrees listed on his personal website, ranging from a master's degree in statistics and forensic psychology to a diploma in art appreciation. Over the years, his knowledge of intellectual property, including various uses of blockchain technology, has been transferred to the trust and corporate scams known as shell games.
He said that in 1997, he founded an Australian trust company called Craig Wright R&D. This company initially owned Blacknet, which he described as a precursor to Bitcoin. In 2002, he transferred this research to another trust entity called Ridges Estate.
In the mid-2000s, while pursuing a postgraduate degree in international trade and business law, he met American security expert Dave Kleiman in an online forum. Although Wright claimed to have only met Kleiman once while drinking in 2013, the two collaborated on numerous projects, including a book on investigating computer hacking behavior written by Wright and edited by Kleiman in 2007. A copy of an email allegedly provided to Gizmodo in 2015 appeared to show Wright requesting Kleiman's help in editing a paper describing Bitcoin. Wright refused to confirm the authenticity of this email, but he insisted that Gizmodo's article was based on forged documents from Kleiman's estate and maintained that he created Bitcoin himself. Boies Schiller Flexner, the law firm representing Kleiman's estate, has yet to respond to requests for comment.
On October 31, 2008, an entity (or individual) using the pseudonym Satoshi Nakamoto released a white paper describing a "peer-to-peer electronic cash system" - Bitcoin. This system allowed for online payments to be sent directly from one party to another without the need for "financial institutions." When the Bitcoin code was released on Sourceforge software repository in January 2009, Nakamoto added a note allowing anyone to use it without any restrictions under the MIT license terms. The copyright was designated as Copyright (c) 2009 Satoshi Nakamoto.
Wright said, "The MIT license is very friendly to intellectual property." He divided the intellectual property related to Bitcoin among four Australian companies under his control, each with different businesses. In an email, he wrote that Information Defense obtained the intellectual property related to the Bitcoin database; Integyrs received his cryptographic research; Greyfog received the IP related to the Internet of Things, and Strassen received the research related to the so-called sharding network.
Although the audit documents from 2010 showed that no patents had been "submitted" yet, Wright stated that he started working to change this situation in the same year. His first Bitcoin-related patent was a method where multiple users could split access code into a blockchain registry to obtain content such as inheritance and company records. This method was granted by the United States Patent and Trademark Office in 2017. In December 2010, Satoshi Nakamoto wrote his last public article starting with, "There is more work to be done..."
Wright said that in early 2011, he and Kleiman, his first wife Lynn, co-founded W&K Info Defense to develop blockchain-related intellectual property. He also renamed Craig Wright R&D to Tulip Trust, which would continue to play a significant role in his business strategy. Although the actual composition of Tulip Trust remains a mystery, Wright stated that Tulip "owns companies, and only owns companies."
On December 13, 2010, the creator of Bitcoin logged in using the pseudonym of Satoshi Nakamoto. This would be one of his final public acts, changing the license from "Copyright (c) 2009-2010 Satoshi Nakamoto" to "Copyright (c) 2009-2010 Bitcoin Developers." A few days later, Andresen released a message stating, "With Satoshi's blessing, I will start to take a more active role in managing Bitcoin, reluctantly."
In the spring of the following year, Satoshi Nakamoto sent what was believed to be his last private message before disappearing. "I've moved on to other things," he wrote in an email to former Bitcoin core developer Mike Hearn, "Handing off to Gavin Andresen and others is a good choice." Hearn confirmed the existence of this email.
A colorful legend emerged: In order to make Bitcoin truly decentralized and without any vulnerabilities, Satoshi Nakamoto wrote the code and released it as a gift to the world, then entrusted a group of open-source developers to help it grow into a global currency independent of banks or governments. Nine months later, Gavin Andresen moved the code repository to GitHub.
In contrast to the evidence presented in the emails sent to Hearn and the leads on Sourceforge, Wright claims that he did not agree to the transfer of power. He states that a group of new Bitcoin developers, including former main maintainer of the codebase Wladimir van der Laan, circumvented his control over the codebase and moved the software to GitHub, changing the license. Wright claims that, essentially, Bitcoin was stolen. "I didn't expect them to do such a thing to bypass my administrative control." "They built a whole new website and kicked me out." In an email to Forbes, van der Laan denies moving the codebase and also denies changing the license. "This was done by Satoshi Nakamoto," he wrote.
Throughout, Wright's work on intellectual property rights continued.
In April 2013, Kleiman passed away, and his brother Ira inherited his estate. W&K own intellectual property rights related to Bitcoin, as well as approximately 1.1 million Bitcoin acquired through mining (currently valued at $33 billion) - though there is no evidence they possess Nakamoto's private keys which are required to transfer these assets.
In 2015, Wright founded DeMorgan Group based in Sydney, claiming to be a "next-generation banking" and "alternative currency" research and development company. He transferred ownership of most of the Bitcoin-related work to DeMorgan and announced that the company was eligible for up to $54 million in grants from the Australian Taxation Office for stimulating innovation. "This grant will enhance the company's cash position," he stated in a declaration, "and is an important source of funding for our development."
With the growth of the business that summer, Wright entered into an agreement with former gambling entrepreneur Stefan Matthews, who purchased DeMorgan's intellectual property for AUD 1.5 million and transferred it to a British company, now named nChain. The nearly AUD 15 million deal also included a five-year, AUD 3.5 million service agreement signed with Wright and granted him and his second wife Ramona 37% ownership of the new venture. The transaction with Matthews also transferred around 90% of Wright's control over intellectual property to nChain. Later, it was discovered that the majority shareholder in nChain is Robert MacGregor, the founder of Canadian payment company nTrust. Forbes attempted to reach out to MacGregor through two email addresses associated with him but was unsuccessful.
On December 8, 2015, after the reports on anonymous leaks were published by Wired and Gizmodo, Wright became a controversial public figure in the cryptocurrency world, claiming that he might be Satoshi Nakamoto, or as Wired put it, "a brilliant liar who desperately wants us to believe." Wright said, "The Wired and Gizmodo articles are based on the information from Ira Kleiman. In order to fabricate a never-happened story about his brother, Ira forged documents, made false statements, and used multiple emails to impersonate multiple contacts with journalists. He did this to get money that doesn't belong to him."
Matthews, Chairman of nChain, said that Wright's newfound fame changed nChain. While his vision for the company has always been to be a long-term software and intellectual property developer, MacGregor saw a Steve Jobs-like figure in Wright, who could stage him before selling the company to Silicon Valley to increase its value. "He wants to sell everything to Silicon Valley," Wright agreed. "He didn't bother to ask for my opinion on Silicon Valley before doing so."
Wright spoke at several events, including a group discussion with another "suspect" of Satoshi Nakamoto, Nick Szabo. He and Matthews both claimed that many of Wright's blog posts, which were identified as the author's, were actually written by MacGregor. This strategy was used to make the world believe once and for all that Wright is Satoshi Nakamoto through a series of "proof meetings". In April 2016, entrepreneur Jon Matonis and software developer Andresen claimed to have witnessed Wright signing a message to the Bitcoin blockchain with an encryption signature related to Satoshi Nakamoto; they subsequently publicly stated that they believed his claims.
Although Wright seemed to have used Satoshi Nakamoto's signature, doubts about its authenticity quickly emerged. A report by Vice indicated that the signature could be forged in multiple ways. Wright's subsequent written explanations were countered by security researcher Dan Kaminsky, who said that the messages could have been sent without knowledge of Satoshi Nakamoto's private key (a type of password).
In his apology on his website, Wright seemed to acknowledge that the evidence was not convincing, but he insisted that he was Satoshi Nakamoto. "As events unfolded this week, I prepared to publish proof of access to the earliest keys, I broke. I don't have courage. I can't," he wrote. "From the beginning, my qualifications and character have been attacked by rumors. When these accusations were proven wrong, new accusations began."
To this day, Wright has not publicly proven himself again, nor has he transferred any bitcoins from Satoshi Nakamoto's account. One of these methods may need to be adopted in an upcoming British court hearing. Matonis claimed that he believed Wright's articles can still be found on his Medium website, but this year, Andresen added a note to his original statement from May 2016, stating, "It was a mistake to trust Craig Wright like me."
Matthews said that in the following months of 2016, Wright spent most of his time at home, occasionally sending him some invention ideas. The hostility between Wright and MacGregor continued to escalate. "I had to act as a referee in some incredible arguments between the two of them," Matthews said. "MacGregor told me that he didn't want anything to do with Craig Wright or nChain anymore." Matthews said that he formed a Maltese private equity fund to buy MacGregor's shares, and by November 2016, MacGregor left the company.
Matthews began looking for new funding.
It didn't take long for him to find former billionaire Calvin Ayre, who had briefly appeared on the US Immigration and Customs Enforcement's most wanted list for running the Bodog gambling business illegally in Maryland. "We believed we were entirely legal," Ayre said. "Once, it was one of the world's largest online gaming companies." In July 2017, he pled guilty to a lesser charge and left the company to become a private investor again. Matthews, who managed Ayre's venture capital work, said he met Wright in 2000 when the inventor helped him conduct a security audit for his gambling industry employer, Centrebet. Matthews thought the two would hit it off. "He brought Wright in," Ayre said. "Told me there was somebody I'd known since 2006. I knew he was Satoshi. So we thought we'd have a talk with you because he needed some assistance."
Matthews flew in from Manila, and Wright flew in from Australia, meeting on the rooftop of Ayre's penthouse in Vancouver. The three spent two days drinking wine, getting to know each other, and having a great time. "The attraction between them started from the moment they looked each other in the eye when I introduced Calvin and Craig," Matthews said. After this meeting, Ayre invested in nChain. "Stefan and I pulled him out," Ayre said. "Built some infrastructure around him and created a complete ecosystem."
If nChain was the foundation of the ecosystem, then they started installing the screws and beams. In August 2017, Ayre acquired the cryptocurrency news website CoinGeek. In 2018, Wright, Ayre, and Matthews launched the fork of Bitcoin called Bitcoin Satoshi Vision (BSV), a cryptocurrency based on a version of Bitcoin prior to 2017, without the upgrades that made Bitcoin more private. "You can mix, you can move with no record," Wright described the transactions in BSV.
According to CoinGecko's data, BSV has achieved some success, with a market capitalization of $767 million, ranking 54th on the cryptocurrency market cap ranking. Wright said he owns a "small amount" of BSV, Ayre said he owns some, "but not a large amount," and Matthews did not respond to questions about his BSV holdings.
In April 2019, Wright registered two copyrights with the U.S. Copyright Office - one for the Bitcoin whitepaper and another for the Bitcoin software. The following month, the office issued a statement saying, "With respect to the two registrations issued to Wright, the Copyright Office does not investigate the truth of any statement made in the submissions, and during the examination process, the Copyright Office took note of the well-known pseudonym 'Satoshi Nakamoto,' and asked the applicant to confirm that Craig Steven Wright is the author and claimant of the works being registered. Wright confirmed this."
If Wright wants to convert this IP into cash, it is likely to be done through nChain. nChain is based in London where Wright resides, but it is formally registered in Zug, Switzerland, which is crypto-friendly. nChain's main source of income is royalties and consulting fees from its granted licenses. Although primarily funded by Ayre, Wright stated that a private equity fund based in Liechtenstein is also an investor, and his wife is a "trustee." When asked to clarify whether nChain has trustees or if he was actually referring to the Tulip Trust, which she helps operate, Wright said the trust is "associated" with nChain.
"I purposely show no foresight or insight," Wright said with a smile when discussing the internal operations of the trustee. "Once I know something, someone will want to sue me, so I make sure I do not know." After a long pause, he added, "I purposely do not know." Documents filed in the Kleiman estate lawsuit against Wright reveal the existence of at least three Tulip Trusts.
Despite having 260 employees, Wright claims this will be nChain's first year of profitability. Chief Intellectual Property Officer Robert Alizon says the company currently has 5 licensees, and he expects that number to grow to 20 by the end of the year. He states that his main goal is to help entrepreneurs build profitable businesses on the BSV blockchain, but nChain also lays the groundwork for charging developers creating projects for other blockchain applications. "We want to support the ecosystem that chooses BSV fundamentally," says Alizon. "Clearly, if people compete without paying fees, we also need to start regulating that. Whether you operate within or outside of BSV, you have the right and must obtain a license from nChain." David Pearce, a lawyer based in Birmingham, UK, tracks 440 nChain patents in Europe alone, and he says, "Many of these patents, for better or worse, are valid." While he has disputed three nChain patents on behalf of Bitcoin consultant Arthur van Pelt, he believes that most other patents have been "validly authorized by the European Patent Office, which is usually regarded as one of the most difficult patent offices in the world to get a patent through."
But there's a catch. While nChain holds 765 patents covering topics such as tokenization, identity management, and microtransactions in jurisdictions like the US, Europe, and China, Forbes has only found one company paying for a BSV license: Oslo-based supply chain firm Unisot, which paid a one-time licensing fee. Among the other licensees, e-Livestock is developing software that allows people in developing countries to use farm animals as collateral, and the company says it has not paid a licensing fee for many years. Ed Rivera of blockchain-based movie studio MyMovies says Wright granted him the right to use streaming and encryption patents, despite Wright telling Forbes that this is not the case. The provincial government of Bataan in the Philippines signed a memorandum of understanding with nChain in December, and if a formal agreement is reached, they can jointly develop the patents they both own.
Based in New Hampshire, Smart Ledger operates on the BSV blockchain, and its Chairman Bryan Daugherty says he doesn't have a license and doesn't believe his company needs one to operate, but he feels protected by nChain. "They're protecting us," he said. "I hope to create a good, friendly atmosphere for the emergence of this technology, beyond the cryptocurrency casinos we see today."
As Wright's team works behind the scenes to build their BSV ecosystem, a complex legal battle is underway that could impact the future of the industry. In February 2018, the estate management of Dave Kleiman filed a lawsuit against Wright in the Southern District Court of Florida, accusing him of "conspir[ing] to take Dave's bitcoins and his rights to certain intellectual property related to Bitcoin technology."
With the postponement of the lawsuit, in January 2021, Wright's team sent a cease and desist letter to Block, a subsidiary of the payment company, demanding the removal of a copy of the Bitcoin whitepaper from their website. The lawyer from the Cryptocurrency Open Patent Alliance (COPA) responded with a letter asking Wright to prove that he wrote the whitepaper, and subsequently filed a lawsuit against him in the UK High Court, seeking a ruling on the inventor's patent rights to prove himself as the author.
In December 2021, back in Florida, the jury in the Kleiman estate case dismissed almost all claims against Wright. W&K (not the estate management firm) was awarded $100 million in damages and $43 million in interest. Wright stated, "Apart from the shares I gifted to Dave, W&K's intellectual property has no relation to Dave." Besides the cash, Wright's reputation may also have been damaged. The judge in the case wrote that she found him to have forged documents and did not believe that the Tulip Trust really existed: "All of the evidence in the record does not convince me of the existence of the Tulip Trust."
But Wright may still have the last laugh. His second wife, Ramona Ang, and his ex-wife have filed documents claiming that Ira Kleiman did not hold controlling interest in W&K and that they are partial owners, suggesting that the judgment may partly fall on Wright's own family. While a federal judge in Florida declined to intervene in this dispute, Wright stated that he is researching the intellectual property owned by W&K. "The only intellectual property the company has is in my mind," he wrote in an email to Forbes. He added that all the documents were with Dave Kleiman but apparently not saved in a way accessible to people."
In February, Wright launched another attack. He claimed that Tulip Trading, under the Tulip Trust, filed a lawsuit in the UK Royal Court against 16 Bitcoin developers, including van der Laan, alleging that they had a fiduciary duty to maintain the Bitcoin code, which effectively stole $3 billion from him, not including the $33 billion worth of Bitcoin claimed by W&K.
Then in June, the UK High Court announced that the COPA case, the Bitcoin developer case, and two other cases would be jointly heard starting from January 2024. In particular, they will examine the "identity issue" that the court said applies to each case. "These cases will not make any progress until Craig Wright proves he is Satoshi Nakamoto," said patent lawyer Pearce. "They all revolve around intellectual property. But they all depend on the premise that Craig Wright is Satoshi Nakamoto. And he's not."
Chief Legal Officer Jess Jonas of the Bitcoin Legal Defense Fund, representing developers involved in cryptocurrency-related projects, is not so optimistic. "People can't just bury their heads in the sand and say, 'Well, you know, he's not Satoshi Nakamoto, so the courts will figure that out and everything will be resolved'," she added, "Developers and other industry participants have paid a great price in having to respond to these claims, they have to because this is about one of the most important open-source licenses. If that protection doesn't exist, then why would people put themselves at risk and develop free open-source software for the public to use?"
When asked if he was concerned about his patents potentially affecting Bitcoin and other open-source developers, Wright replied, "They're public. If people don't check these things, that's not my fault." Although Wright indicated plans to enforce his intellectual property more broadly, his current focus is on the ongoing case and obtaining licensing fees from those willing to pay. One possible future defendant is Apple, as Wright claims the company infringed copyright by distributing the Bitcoin whitepaper on certain devices.
As Wright prepares for the January High Court hearing, he stated that much of his legal strategy will depend on the migration of the Bitcoin code repository to Github, as well as alleged actions to circumvent his administrative control. He described it as a violation of the 1990 UK Computer Misuse Act. Wright said, "This is a criminal offense."
