Forbes investigates Craig Wright: Whether he is Satoshi Nakamoto is no longer as important

“I don’t like Silicon Valley, they’re the cancer of the world,” Wright said. “They can steal anything they want.” He paused, seeming to reconsider his words, and added: “They are cancerous hemorrhoids on the ass of the world.”

Dr. Craig Steven Wright was born in Brisbane, Australia in 1970, with a mother who inputted data onto punch cards for early computers and a father who served in Vietnam. Wright is a polymath, with his personal website listing more than 20 degrees, ranging from a Master’s in Statistics and Forensic Psychology to a diploma in Art Appreciation. Over the years, his intellectual property research (including various uses of blockchain technology) has been transferred to trusts and shell companies.

He said he formed an Australian trust company called Craig Wright R&D in 1997. The company originally owned Blacknet, which he described as a precursor to Bitcoin, and in 2002 he transferred the research to another trust Ridges Estate.

In the middle of 2000, he met American security expert Dave Kleiman on an online forum while pursuing a graduate degree in international trade and commercial law. Although Wright said he only met Kleiman once, over drinks, before he died in 2013, the two worked together on many projects, including an investigation into computer hacking behavior that Wright wrote with others in 2007 and Kleiman edited. A copy of an email reportedly sent by Wright to Kleiman in 2015 and provided to Gizmodo appears to show Wright asking Kleiman to help him edit a paper describing Bitcoin. Wright would not verify the email’s authenticity, but he claimed Gizmodo’s article was based on forged documents provided by Kleiman’s estate, and he insisted that he created Bitcoin himself. Boies Schiller Flexner, the law firm representing Kleiman’s estate, did not respond to requests for comment.

On October 31, 2008, a group (or individual) using the pseudonym Satoshi Nakamoto published a white paper describing a “peer-to-peer electronic cash system” — Bitcoin — that allowed for online payments to be sent directly from one party to another without “going through a financial institution.” When the Bitcoin code was released to the Sourceforge software repository in January 2009, Nakamoto added a comment allowing anyone to use it under the terms of the MIT license. Its copyright was designated as “Copyright (c) 2009 Satoshi Nakamoto.”

Wright said: “The MIT license is very friendly to intellectual property.” He gave the bitcoin-related intellectual property to four Australian companies that he controls, each with different businesses. In an email, he wrote that Information Defense obtained the intellectual property related to the bitcoin database; Integyrs obtained his cryptography research; Greyfog received IP related to the Internet of Things, and Strassen received research related to the so-called sharding network.

Although the 2010 audit file showed that no patents had yet been “submitted,” Wright said he began efforts to change this situation in the same year. His first bitcoin-related patent was a method for multiple users to split access code into a blockchain registry to access inheritance and company records. This method was granted by the US Patent and Trademark Office in 2017. In December 2010, Nakamoto wrote his last public article, beginning with “There is more work to be done…”

Wright said that in early 2011, his first wife Lynn and Kleiman established W&K Info Defense to develop blockchain-related intellectual property. He also renamed Craig Wright R&D to Tulip Trust, which will continue to play an important role in his business strategy. Although the actual composition of Tulip Trust is still a mystery, Wright said Tulip “owns companies and only owns companies.”

On December 13, 2010, the creator of Bitcoin used Nakamoto’s pseudonym to log in, which would be one of his last public acts, changing the license from “Copyright (c) 2009-2010 Satoshi Nakamoto” to “Copyright (c) 2009-2010 Bitcoin Developers”. A few days later, Andresen posted a message: “With Nakamoto’s blessing, I will start more active project management of Bitcoin, although I am reluctant.”

The following spring, Nakamoto sent what was considered his last private message and then disappeared. “I’ve moved on to other things,” he wrote in an email to former Bitcoin core developer Mike Hearn. “Handed over to Bitcoin core developers Gavin Andresen and others, it was a good choice.” Hearn said there was indeed such an email.

Thus began a colorful legend: in order to make Bitcoin truly decentralized, it could not have any loopholes, so Nakamoto wrote the code out as a gift to the world, and then entrusted a group of open source developers to help it grow into a global currency that did not rely on banks or governments. Nine months later, Gavin Andresen moved the codebase to Github.

Contrary to the emails sent to Hearn and the Sourceforge leads, Wright claimed that he did not agree to the transfer of power. He claimed that a group of new Bitcoin developers, including former code repository maintainer Wladimir van der Laan, circumvented his code repository management rights, moved the software to Github, and changed the license. Wright claimed that, essentially, Bitcoin was stolen. “I didn’t expect them to do such a thing to bypass my administrator control,” he said. “They set up a brand new website and then kicked me out.” In an email to Forbes, van der Laan denied moving the code repository and also denied changing the license. “This was done by Satoshi,” he wrote.

Throughout, Wright’s intellectual property work continued.

In April 2013, Kleiman died and his brother Ira inherited his estate. W&K owns Bitcoin-related intellectual property, as well as about 1.1 million Bitcoins (currently worth $33 billion) obtained through mining—although there is no evidence that they have the private key to Satoshi and transferring these assets requires that private key.

In 2015, Wright founded DeMorgan Group, headquartered in Sydney, which claimed to be a “next-generation banking” research and development company focused on “alternative currencies.” He transferred ownership of most of his Bitcoin-related work to DeMorgan and announced that the company was eligible for up to AUD 54 million in subsidies from the Australian Taxation Office for innovation stimulus. “This subsidy will enhance the company’s cash position,” he said in a statement at the time, “and is an important source of funding for our development.”

As business grew that summer, Wright signed an agreement with former gambling entrepreneur Stefan Matthews to purchase DeMorgan’s intellectual property for AUD 1.5 million, which was transferred to a UK company now known as nChain. The scheme, worth nearly AUD 15 million, also included a five-year, AUD 3.5 million service agreement with Wright and the transfer of 37% of the new company’s shares to Wright and his second wife Ramona. The transaction with Matthews also transferred control of about 90% of Wright’s intellectual property to nChain. Later, nChain’s largest shareholder was found to be Robert MacGregor, founder of Canadian payment company nTrust. Forbes attempted to contact him through two email addresses associated with MacGregor, but neither was successful.

To date, Wright has not publicly proven it again, nor has he transferred any bitcoins from Satoshi Nakamoto’s account. One of the methods may be required for the upcoming UK court hearing. Matonis claimed that he believed Wright’s articles could still be found on his Medium website, but this year, Andresen added a note to his original statement in May 2016, saying that “it is a mistake to trust Craig Wright like me.”

Matthews said that Wright spent most of his time at home in the following months of 2016, occasionally sending him some inventive ideas. The enmity between Wright and MacGregor continued to escalate. “I have to act as a referee in some incredible quarrels between them,” Matthews said. “MacGregor told me that he no longer wanted any relationship with Craig Wright or nChain.” Matthews said that he set up a Maltese private equity fund to buy MacGregor’s shares, and by November 2016, MacGregor had left the company.

Matthews began looking for new funds.

Soon, he found former billionaire Calvin Ayre, who briefly appeared on the US Immigration and Customs Enforcement’s wanted list for operating the Bodog gambling business, which was accused of illegal operations in Maryland. “We think we are completely legal,” Ayre said. “Once, it was one of the world’s largest online gaming companies.” In July 2017, he admitted to a lesser charge and left the company, becoming a private investor again. Matthews, who manages Ayre’s venture capital work, said he met Wright in 2000, when the inventor helped his gambling industry employer Centrebet conduct a security audit. Matthews believed the two would hit it off. “He invited Wright in,” Ayre said, “and told me there was someone I had known since 2006. I knew he was Satoshi Nakamoto. So we want to talk to you because he needs some help.”

Matthews flew from his Manila home, and Wright flew from Australia to meet on the roof of Ayre’s Vancouver penthouse. The three spent two days drinking red wine, getting to know each other, and having fun. “When I introduced Calvin and Craig, they had an attraction from the moment they looked at each other,” Matthews said. After this meeting, Ayre invested in nChain. “Stefan and I pulled him out,” Ayre said, “created some infrastructure around him, and created a complete ecosystem.”

If nChain is the foundation of the ecosystem, then they start installing bolts and beams. In August 2017, Ayre acquired the cryptocurrency news website CoinGeek. In 2018, Wright, Ayre, and Matthews launched a fork of Bitcoin called Bitcoin Satoshi Vision (BSV), a cryptocurrency based on a version of Bitcoin prior to 2017 that does not include upgrades that make Bitcoin more private. “You can mix, you can transfer, there’s no record,” Wright describes the transactions in BSV.

According to CoinGecko data, BSV has achieved some success with a market capitalization of $767 million, ranking 54th in the cryptocurrency market cap rankings. Wright says he owns a “small amount” of BSV, Ayre says he owns some, “but not a lot,” 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 white paper and the other for Bitcoin software. The following month, the agency 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 examination process, the Copyright Office noted a correspondence with the well-known pseudonym ‘Satoshi Nakamoto’ and asked the applicant to confirm that Craig Steven Wright was the author and owner of the works being registered. Wright confirmed this.”

If Wright wants to monetize that IP, he is likely to do so through nChain. Nchain is based in London, where Wright lives, but is formally registered in crypto-friendly Zug, Switzerland. Nchain’s main source of revenue is royalties and consulting fees from its licensed patents. While primarily funded by Ayre, Wright says a private equity fund based in Liechtenstein is also an investor, and his wife is a “trustee.” When asked to clarify whether nChain has a trustee, or whether he was actually referring to the Tulip Trust she helps run, Wright said the trust fund is “associated” with nChain.

“I pretend to have no foresight or insight,” Wright laughs when discussing the internal workings of the trust. “Once I know something, someone wants me to take it to court, so I make sure I don’t know. After a long pause, he adds: “I intentionally don’t know.”

Documents filed by Kleiman’s estate in the lawsuit against Wright show that there are at least three Tulip Trusts.

Despite having 260 employees, Wright claims this will be nChain’s first profitable year. Chief Intellectual Property Officer Robert Alizon says the company has five individuals licensed, and he expects that number to grow to 20 by the end of the year. He says his main goal is to help entrepreneurs build profitable businesses on the BSV blockchain, but nChain is also laying the groundwork for charging developers who create projects for other blockchain applications. “We want to fundamentally support the ecosystem that chooses BSV,” says Alizon. “Obviously, if people are competing 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 nChain’s license.” David Pearce is a lawyer based in Birmingham, UK, who tracks 440 nChain patents in Europe alone. He says, “Many of these patents are valid, good or bad.” Although he has objected to three nChain patents on behalf of Bitcoin advisor Arthur van Pelt, he believes that most other patents have “received effective authorization from the European Patent Office, which is often considered one of the world’s most difficult patent offices to apply for.”

But here’s the problem. Despite having 765 patents in jurisdictions such as the United States, Europe, and China, covering topics such as tokenization, identity management, and micropayments, Forbes could only find one company paying for a BSV license: Oslo-based supply chain company Unisot, which paid a one-time license fee. Among 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 license fee for many years. Ed Rivera of blockchain-based movie studio MyMovies says Wright has granted him the right to use streaming and encryption patents, although Wright tells Forbes that is not true. The government of Batan province in the Philippines signed a memorandum of understanding with nChain in December to jointly develop patents owned by the company if a formal agreement is reached.

Smart Ledger, based in New Hampshire, is based on BSV, and its chairman, Bryan Daugherty, says he has no license and does not believe his company needs a license to operate, but feels protected by nChain. “They’re protecting us,” he says, “and hoping to create a good, friendly atmosphere for the emergence of this technology, beyond the cryptocurrency casino we see today.”

Behind the scenes of the Wright team building its BSV ecosystem, a complex legal battle is underway that could impact the future of the industry. In February 2018, the estate manager of Dave Kleiman sued Wright in the Southern District of Florida, accusing him of “conspiring to take Dave’s Bitcoin and his rights to certain intellectual property related to Bitcoin technology.”

With the lawsuit delayed, in January 2021, Wright’s team sent a cease-and-desist letter to payment company Block’s cryptocurrency subsidiary, requesting that it remove a copy of the Bitcoin white paper from its website. Lawyers from the Cryptocurrency Open Patent Alliance (COBlocking), a patent trade organization, responded with a letter asking Wright to prove that he wrote the white paper, and subsequently sued him in the UK High Court to make a ruling on the inventor’s patent rights and prove himself as the author.

In December 2021, back in Florida, the jury in the Kleiman estate case rejected almost all claims against Wright. W&K (not the estate management firm) was awarded $100 million in damages and $43 million in interest. Wright said, “W&K’s intellectual property has nothing to do with Dave except for shares I gifted to him.” In addition to the cash, Wright’s reputation may have been damaged. The judge in the case wrote that she found he had forged documents and did not believe the Tulip Trust actually existed: “All the evidence in the record does not prove the existence of the Tulip Trust.”

But Wright may still have the last laugh. His second wife, Ramona Ang, and his ex-wife filed documents claiming Ira Kleiman did not own W&K’s stock and that they were part owners, suggesting the ruling may be partially attributed to Wright’s own family. While a federal judge in Florida declined to intervene in the dispute, Wright said he is researching the intellectual property owned by W&K. “The only intellectual property the company had was in my head,” he wrote in an email to Forbes. He added that all the documents were with Dave Kleiman, but he apparently did not save them in a way that people could access them.”

In February, Wright launched another attack. He said Tulip Trading, a company under Tulip Trust, had sued 16 Bitcoin developers, including van der Laan, in the Royal Court of Justice in the UK, claiming they had a fiduciary duty to maintain the Bitcoin code, which effectively stole $3 billion from him, not including the $33 billion in Bitcoin claimed by W&K.

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