2024iii15, Friday: Not Wright.

One could argue that this post is a wee bit previous.

But yesterday was a huge, huge moment - for the crypto industry, certainly, but also for a whole raft of lawyers who've been following this case with bated breath for years.

Which case?

The one where an Australian dude insisted he was Satoshi.

And according to the High Court in London: he's really not.

The above two sentences tell a whole story to anyone who's been following it, and absolutely nothing to anyone who hasn't.

So: a bit of context.

In 2009, a white paper appeared online entitled "Bitcoin: a peer-to-peer electronic cash system". The identity of its pseudonymous author, Satoshi Nakamoto, has been a topic of hot (and heated) debate ever since. And for many years, Craig Wright, an Australian developer, has insisted that Satoshi and he were one and the same.

This isn't just a matter of academic interest. It goes significantly to who gets to control the ongoing development of Bitcoin: whose fork is the main one, who may control some of the IP involved, and so on. So it's not just bragging rights.

Wright has taken this all pretty seriously. He, and some hefty financial backers, have spent huge sums in suing a bunch of people (and getting sued and countersued along the way), keeping London's courts rather busy over the past half-decade or so. There have been too many hearings to list, but this selection from BAILII will give you the idea. They're primarily but not solely about intellectual property (who owns Bitcoin) and defamation (because Wright has sued people for saying he isn't Satoshi), and it's all got a bit tangled.

(There have been hearings in other jurisdictions too. Notably in the US, where at least one judge has called Wright a liar: see page 6 of this Federal Court decision, for instance.)

It's all come to a head with a multi-week hearing in the High Court in London this year. This was designed to be a preliminary to a range of other hearings: the judge, Mellor J, had earlier decided that since so much of everything else turned on the question of whether Wright's assertion as to his being Satoshi was true, the best thing to do was to settle that in isolation.

By all accounts, the hearings were fascinating. Allegations of perjury, forgery, lying and much more.

Normally in cases like this, judgment will be reserved. That is, the judge will say: thanks for the evidence and submissions, I need to have a think, and I'll get a written judgment to you in due course. Sometimes, particularly in appeals, the court will say: OK, here's the outcome, written reasons to follow. But with something of this magnitude, and this length and complexity: no. Not usually.

So it came as a bit of a shock when yesterday (Thursday 14 March 2024), once closing arguments concluded Mellor J followed up a comment that his written judgment would be "ready when it's ready and not before" with this:

However, having considered all the evidence and submissions presented to me in this trial, I've reached the conclusion that the evidence is overwhelming.
Therefore, for the reasons which will be explained in that written judgment in due course, I will make certain declarations which I am satisfied are useful and are necessary to do justice between the parties.
First, that Dr Wright is not the author of the Bitcoin White Paper.
Second, Dr Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period 2008 to 2011.
Third, Dr Wright is not the person who created the Bitcoin System.
And, fourth, he is not the author of the initial versions of the Bitcoin software.

Wow. Just... wow.

OK. It's fair to say that things had... um... not gone Wright's way during the hearings. The interlocutory skirmishing in previous hearings had already set the tone with allegations that a number of the documents on which Wright sought to rely were confections. And during cross-examination, that impression was apparently heightened. Significantly.

But the immediacy of the finding was still a wholly unexpected bombshell. Wright went to court to have his claim to be Satoshi receive the legal seal of approval. And the court said: no. You're not.

And the fact that the court said so immediately only underlines the degree to which Wright's case must have fallen apart under close forensic examination. Because this is an important point which people sometimes forget but which any advocate worth their salt knows in their bones: even if the case looks great on paper in the pleadings (and it should; it's your job to make sure of that), it's what happens in court that matters. When a decent opponent who's looked at every single page of documentary evidence and every word of every witness statement, cross-referenced and tabulated any inconsistencies and lacunae, will - no doubt courteously and kindly, but nonetheless with implacable insistence - put your witnesses on the spot for every single one.

(On the subject of looking at every single page, one can do far worse than reading this wonderful piece by the late Edmund King QC, entitled "How to lose a case". More in here than in a year of bar school. I'd recommend it to anybody. And have. Repeatedly.)

We've all had that moment, when your key witness opens their mouth and shoves their own foot far, far past their epiglottis by trying to defend what turns out to be the indefensible (as, if you're any good, you will have pointed out to them beforehand). And you sit, as still and impassive as possible, as in a parallel universe your inner self bangs its head on the desk in front of you.

I imagine Wright may well appeal this, once the whole judgment is handed down. His backers - which, as an old and trusted colleague Rory Cellan Jones points out includes "the Canadian casino billionaire Calvin Ayre, who built a blockchain empire around the Australian’s claim to be Satoshi, including a crypto coin called BSV" - will probably stick by him for this.

But by any measure, this is huge. As Rory points out, it's also one in the eye for lawfare, since part of Wright's apparent strategy here has been to sue the socks off people who probably can't throw the money around that he's been able to. The costs are likely to be eye-watering; and if as seems possible Mellor J finds Wright's evidence not only to be unconvincing but deliberately made-up, I'd guess that indemnity costs are in play. Which means that any time there's ambiguity as to whether the winner's costs are reasonable, they get them anyway. (A court can still say that costs simply aren't reasonable - but questions of whether they were proportionate to the matter at hand don't enter into it. Indemnity costs are really expensive.)

Added to which, if - and it's a big if - Mellor J finds that Wright lied to him, then either the court or the other parties could seek to have him held in contempt. Or the judge could pass the file to the CPS for potential criminal perjury proceedings.

Either way, this could, potentially, end up with a jail sentence for Wright. Watch this space.

And in the meantime, like heaven only knows how many others, I'm on tenterhooks for the written judgment. It's going to be a page-turner.