Craig Wright Demands Bitcoin Developers Give Him Access to Stolen Mt. Gox Coins

Coindesk
02/24/2021

Craig Wright claims someone “stole” 110k BTC from him from wallets connected to the Mt. Gox hack. He wants Bitcoin developers to get them back.

Craig Wright’s legal pursuits have leapfrogged from threatening to sue Bitcoin contributors over their hosting the Bitcoin white paper to a legal threat that sets his sights on bitcoin connected to the Mt. Gox hack.

The BitcoinSV progenitor and self-proclaimed Bitcoin creator sent a Letter Before Action to Bitcoin Core contributors this week through his law firm, Ontier LLP. In the letter, Wright’s Tulip Trading Ltd. (TTL) demands access to two wallets which contain 31,000 and 79,957 BTC (+0.72%).

The wallets, curiously, are connected to the hack that drained 800,000 BTC from the world’s then most-popular bitcoin exchange in 2014. Wright claims the bitcoin in the wallets were stolen from him last year.

Even though Bitcoin Core contributors have no control over the network’s wallets, Wright wants Bitcoin’s developers to hand him the keys.

“In accordance with their fiduciary duties,” the letter reads, “each of the Developers is obliged to: a. Provide access and control to TTL of the BTC in the Addresses, which it owns but cannot access or control due to the hack/theft. b. Take all reasonable steps to ensure that TTL has access to and control of the BTC in the Addresses.”

The letter alleges that “on or around 5 February 2020, unknown hackers stole the private keys for the Addresses and deleted copies of the keys on Dr Craig Wright’s computer, preventing him from accessing the digital assets at those Addresses, which he operated on behalf of TTL.”

'Doomed to failure'

Craig Wright has made repeated headlines for his unsubstantiated claim that he is Bitcoin’s creator, Satoshi Nakamoto, and he has even sued those who have challenged this claim. Most recently, he threatened to sue Bitcoin Core contributors who hosted Bitcoin’s white paper for copyright infringement.

Ontier LLP says the letter could materialize into legal action if the recipients do not comply. However, the request in the letter – for Bitcoin developers to seize funds in Bitcoin addresses they don’t own – is literally impossible. To seize these funds would require the multimillion (if not billion) dollar endeavor of reorganizing Bitcoin’s blockchain history with a 51% attack. The developers could also fork the blockchain to seize the funds, but that blockchain would not be Bitcoin – it would be just another fork.

For myriad reasons, Stephen Palley, a partner at Anderson Kill law firm, told CoinDesk “a lawsuit like this is doomed to failure.”

“While I can’t speak to English law, the notion that a bunch of open-source developers will be compelled to fork public blockchains and require miners and nodes to adopt the fork so that Wright can receive funds that he claims were stolen is, in my opinion, not credible. [It] will do nothing more than force people to pay legal fees – all of which are likely going to be owed by Wright.”

Palley said that the claim that open-source developers owe Wright fiduciary obligations and damages for losses in absence of a contract “is novel and faces considerable legal and factual problems.”

“I can tell you with near certainty that any judgment in that case would not be enforceable in the U.S. And I doubt it will get very far in English courts either. I’m hopeful that the Bitcoin community will come together as it has in the past and provide support to any developer who has received these letters. We’ve already heard from some people who are outraged by this maneuver and expect to hear from more,” Palley concluded.

Related People

Blockchain and Virtual Currency Attorney | Anderson Kill P.C.
Stephen D. Palley
Partner
Washington, DC

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