Autism Center of Alleged Crypto Inventor Wright’s Fraud Trial

A brilliant autistic cryptocurrency developer or a brilliant con artist?

That’s what a federal jury in Miami has to decide about Australian-born Craig Wright, who alleges he is Satoshi Nakamoto, the inventor of the most popular cryptocurrency Bitcoin and underlying blockchain technology. Ira Kleiman, the brother of the late Dave Kleiman, sued Wright in 2018 claiming Wright defrauded Dave out of the profits of their partnership and Dave Kleiman’s estate is entitled to half of the estimated US$68 billion worth of 1.1 million Bitcoins he and Wright jointly mined and intellectual property rights to the cryptocurrency’s source code. Dave Kleiman’s estate, which Ira represents, is also seeking punitive damages. Kleiman died in April 2013.

According to numerous articles in blockchain publication CoinDesk, which has covered the trial extensively, Wright insists that Dave Kleiman was nothing more than a friend and confidante who played a minimal role in any development and mining of Bitcoins. The crux of Wright’s defense is that his autism affected his social interactions to the point where he did not understand the meaning of a legal partnership. Wright’s expert witness Dr Ami Klim, director of the Marcus Autism Center in Atlanta, never met Wright in person, yet claims that Wright suffers from autism after interviewing him on video and interviewing family members. Dr. Klim, who first diagnosed Wright in 2018, was hired by Wright’s defense team as an expert witness to explain how Wright’s autism might have affected his presentation skills in legal proceedings so Wright could justify his contradictory comments and combative nature. The autism diagnosis carried some weight with Judge Beth Bloom of the District Court in the Southern District of Florida who denied Ira Kleiman’s request to sanction Wright over his early misbehavior in court before she ordered a trial.

The stakes are high. Both Wright and Ira Kleiman appear to agree that he is really the pseudonymous Satoshi who invented Bitcoin. However, Kleiman claims that his brother Dave was a co-inventor. Ira Kleiman says that Wright and his brother Dave formed a company called W&K Info Defense Research LLC they used to mine Bitcoin and organize their intellectual property — the Bitcoin source code. Ira Kleiman insists that Dave was entirely responsible for mining the Bitcoins in question and Wright fraudulently swindled them by forging numerous documents after Kleiman’s death to appear as though Kleiman had signed away any assets . Wright acknowledges the existence of W&K, but says that he was never involved in W&K and that it was a venture run by his ex-wife Lynn Wright and Dave Kleiman.

While Wright initially called Dave Kleiman a partner, after Kleiman’s death Wright began to offer contradictory explanations about their relationship and after Ira Kleiman filed suit in 2018 Wright downgraded his relationship with Dave Kleiman to a friendship. Ira Kleiman’s legal counsel has never produced any legal agreement between Wright and Dave Kleiman explaining their legal relationship or how they would divvy up any profits. Instead, Ira Kleiman is relying heavily on Wright’s emails and other correspondence which Wright says were either taken out of context or hacked. Any emails sent to Dave Kleiman’s family and others after his death praising his work were not intended to indicate he was a business partner, says Wright. They were only meant to preserve avid Kleiman’s legacy. In his testimony,

Wright acknowledges that Dave Kleiman did mine 1 million bitcoins with him after reports of Bitcoin’s involvement with illegal finance in 2011. However, Wright insists that the Bitcoins were mined in a test environment and not transferable to a wallet. Therefore, those Bitcoins have no value. Other witnesses called by Wright’s defense team also claim that Dave Kleiman was in ill health and unable to do any work, let alone complicated coding. He became a paraplegic after a 1998 motorcycle accident and spent much of his last years in the hospital. One of Ira Kleiman’s expert witnesses also say that Kleiman had no knowledge of Satoshi’s the C++ coding used to create Bitcoins. Nonetheless, after Dave Kleiman’s death Wright offered his brother Ira US$12 million of his own money to become a director at one of Wright’s companies, but Ira refused.

It is unlikely that the outcome of the case will solve the mystery of Satoshi Nakamoto’s identity as too many cryptoexperts dispute Wright’s assertion he is Satoshi. Their skepticism is bolstered by Wright’s refusal to move his Bitcoins out of his wallet in 2016 and cryptoexperts said that any cryptographic evidence Wright provided to show he is Satoshi is fraudulent. At best, the jury’s verdict will resolve the issue of whether Kleiman’s estate is entitled to half of the US$68 billion worth of Bitcoins, any intellectual property rights, and punitive damages.

There just one major catch to the outcome. Even if Ira Kleiman wins the lawsuit, he might never see a single Bitcoin. If Wright lost the private key to his wallet where the cryptocurrency is hidden or claims he lost the key, he cannot access any of the Bitcoins. Therefore, Kleiman may end only up with damages which Wright will not be able to pay if his assets are registered to his ex-wife, as he claims. Some cryptoexperts also contend the Bitcoins in question don’t exist and Wright’s trial never clearly addresses their validity or whether Wright can retrieve them. What started off as a case of a possible contractual dispute may ultimately end up becoming nothing more than an interesting tale of autism used as a defense for a muddled relationship.