Wright sued over RM19.6b bitcoin fraud

DELAWARE • Craig Wright, the self-proclaimed inventor of bitcoin, is accused of swindling more than US$5 billion (RM19.55 billion) worth of the cryptocurrency and other assets from the estate of a computer-security expert.

Wright — who claimed in 2016 that he created the computer-based currency under the pseudonym Satoshi Nakamoto — allegedly schemed to use phony contracts and signatures to lay claim to bitcoins mined by colleague Dave Kleiman, another cryptocurrency adherent, who died in 2013, according to a lawsuit filed by Kleiman’s brother.

Kleiman’s family contends they own the rights to more than one million bitcoins and blockchain technologies Kleiman mined and developed during his lifetime and that the assets’ value exceeds US$5 billion, according to the Feb 14 filing in federal court in West Palm Beach, Florida.

“Wright forged a series of contracts that purported to transfer Dave’s assets to Wright and/or companies controlled by him,’’ lawyers for Kleiman’s family said in the complaint. “Wright backdated these contracts and forged Dave’s signature on them.’’ Wright, an Australian who lives in London, couldn’t immediately be reached for comment on the suit, which also accuses the entrepreneur of violating partnership duties to Kleiman and unjustly enriching himself at his colleague’s expense. There is no attorney listed for Wright on the docket.

Wright and Kleiman formed a Florida-based company, W&K Info Defence Research LLC, in 2011 to focus on cyber-security, according to the court filing.

The pair also had earlier worked together on the development of bitcoin and had extensive mining operations, according to the family’s lawsuit.

The pair controlled as many as 1.1 million bitcoins at the time of Kleiman’s death, according to the suit. They were held trusts set up in Singapore, the Seychelles Islands and the UK, the suit said. Wright said in a 2016 blog post and interviews that he was the main participant in a team that developed the original bitcoin software under the pseudonym Satoshi Nakamoto.

After sceptics questioned the claims, Wright said he decided not to present any further evidence to prove that he is the creator of bitcoin.

In the filing, Kleiman’s brother included what he said is email traffic between himself and Wright in which the entrepreneur indicates he may have been holding 300,000 of Kleiman’s bitcoins.

Dave “mentioned that you had one million bitcoins in the trust and since you said he has 300,000 as his part”, the computer expert’s brother wrote.

“I was figuring the other 700,000 is yours,” he added in the email. “Is that correct?”

“Around that,” Wright wrote back. “Minus what was needed for the company’s use.”

The case is Ira Kleiman v Craig Wright, No 18-cv-80176, US District Court for the Southern District of Florida. — Bloomberg