COPA v Wright – High Court Finds That Dr Wright Is Not Satoshi Nakamoto, Bitcoin’s Pseudonymous Founder

At the conclusion of a 6-week trial, which at one point had over 1100 people watching online, Mr Justice Mellor declared that Dr Craig Wright was not Satoshi Nakamoto, the pseudonymous creator of Bitcoin and author of the Bitcoin White Paper. The initial declaration, made orally following the end of counsel’s closing arguments, was followed by a comprehensive and eviscerating judgment ([2024] EWHC 1198 (Ch)) in which the Judge found that Dr Wright had engaged in forgery “on a grand scale” in support of his false claim to be Satoshi. The Judge also granted relief including a worldwide anti-suit injunction preventing Wright from asserting his false claim, as well as referring Dr Wright and Stefan Matthews, who gave witness evidence for Dr Wright, to the Crown Prosecution Service (CPS) to consider whether they should be prosecuted for perjury.

Background

In late October 2008, an individual or group using the alias “Satoshi Nakamoto” unveiled the Bitcoin White Paper, a seminal document that laid the groundwork for the Bitcoin system, as well as other blockchain and cryptocurrency technologies. The source code was then released in January 2009, and early enthusiasts began mining. Satoshi remained active in Bitcoin’s development until April 2011, after which they disappeared from the public eye.

In late 2015, a then unknown Australian citizen, Dr Craig Wright, was “outed” as Satoshi in articles in Wired and Gizmodo. Immediately, the “proof” that underpinned that “outing” was called into question by the Bitcoin community, some of which appeared to have been doctored. Shortly thereafter (in May 2016), Dr Wright publicly announced that he was Satoshi, publishing further “proof” of this claim which supposedly demonstrated ownership of Satoshi’s private cryptographic keys. Once again, this proof was immediately called into question, when it was discovered that the signature used by Dr Wright had been taken from an early (and publicly available) Bitcoin transaction, and as such did not support his claim to be Satoshi.

Since around 2019, after a brief period out of the public eye, Dr Wright has been involved in multiple litigation in various jurisdictions, all related to his claim to be Satoshi. These have included defamation proceedings against individuals who questioned his claims to be Satoshi online, as well as proceedings in the US involving the ownership of a large amount of mined Bitcoin which centred around whether Dr Wright created Bitcoin in collaboration with a deceased computer forensics expert, Dave Kleiman.

In early 2021, Dr Wright wrote to a number of organisations who were hosting the Bitcoin White Paper, including the Crypto Open Patent Alliance (COPA), a non-profit organisation promoting the open-source development of cryptocurrencies, seeking to enforce his copyright in the paper. COPA responded by issuing proceedings seeking declaratory relief that Dr Wright was not the author of, or owner of copyright in, the Bitcoin White Paper (the “COPA Proceedings”).

Following issue of the COPA Proceedings, Dr Wright brought a number of new IP claims against COPA and others. They included a claim for database rights infringement against 26 defendants (including a number of Bitcoin developers), and a passing off claim for the use of the name “Bitcoin”. By the time of trial these claims were being jointly managed, so that the resolution of the main “identity” issue in the COPA Proceedings (i.e. whether Dr Wright is Satoshi) would apply to all four of the claims.

The Trial and Declaration

During the trial, much of the focus was on a selection of the documents produced by Dr Wright (including many primary reliance documents relied on by Dr Wright to support his claim), which COPA pleaded as forgeries supporting Dr Wright’s claim. In addition to the document initially disclosed, Dr Wright found several new sources of documents during the proceedings, which he indicated was further/better proof of his claim, all of which were “discovered” after COPA served its document forensics expert report in respect of his original disclosed documents.

COPA also brought a number of factual witnesses involved in the early days of Bitcoin, whose accounts of events stood in contrast to the account given by Dr Wright. These included, Martti Malmi, who corresponded with Satoshi from 2009 and was involved in setting up the Bitcoin forum and contributing to the early Bitcoin code. Mr Malmi gave a different account of the timeline of his correspondence with Satoshi to that provided by Dr Wright. He also provided never-before-seen emails between himself and Satoshi as part of his evidence.

Another important aspect was factual evidence brought in support of COPA’s document forgery case. For example, COPA relied on evidence from John Hudson, the lead designer of the Nirmala UI font which featured in documents purporting to date to 2008, who confirmed that it was not publicly available until March 2012.

During the trial, Dr Wright was cross examined across 8 days, on his backstory and claims, as well as on the pleaded forgeries identified by COPA and his case on the anomalies in those documents identified by COPA’s experts (in particular its document forensics and LaTeX experts). Dr Wright produced a variety of excuses in relation to those documents, ranging from descriptions of his complex Citrix environment to the presence of a malicious “bad actor” who planted documents which he then disclosed. He was also cross-examined on his technical understanding of aspects of the Bitcoin code.

Interestingly, Dr Wright was recalled twice to deal with new documents disclosed by him during trial. Notably, one such document was an email produced by Dr Wright supposedly between himself and his former solicitors, which was then challenged when his former solicitors produced a different, genuine version of the email which did not support Dr Wright’s evidence.

The Declaration and Main Judgment

Following the conclusion of trial, Mr Justice Mellor declared that the evidence had been “overwhelming”, such that he felt able to make declarations from the bench that Dr Wright was not Satoshi, and had therefore not authored the Bitcoin White Paper, source code or Bitcoin system.

Following this declaration, Mr Justice Mellor handed down his 231 page judgment just over two months later, on 20 May 2024,  concluding that Dr Wright’s attempts to prove he was/is Satoshi Nakamoto represented a “most serious abuse of [the] Court’s process”, that Wright had “engaged in the deliberate production of false documents to support false claims” and that Dr Wright had “use[d] the Courts as a vehicle for fraud”.

Setting the tone for the judgment, in paragraph [2] the Judge noted Dr Wright presented himself “as an extremely clever person” but that he was “not nearly as clever as he thinks he is”. Mr Justice Mellor ultimately found for COPA in respect of each of its pleaded forgeries, most of which he concluded were “clumsy”, noting that he did not believe Satoshi would have resorted to forgery in his attempt to prove he was Satoshi, and would be “most unlikely to have any real difficulty in proving he was Satoshi”. By contrast, Dr Wright was found to have forged documents on an “grand scale”. Commenting on a particularly devastating round of technical cross-examination on the Bitcoin code, the Judge concluded that Dr Wright’s lack of knowledge of a number of elements of the Bitcoin code and system were simply not things that Satoshi would have got wrong.

The Judge also highlighted the holes in Dr Wright’s account of the development of Bitcoin, noting that while Dr Wright’s account was that he (as Satoshi) had transferred Bitcoin to “a lot of people”, it was striking that when cross examined on it he could not remember the name of a single person to whom he had transferred any Bitcoin.

Regarding the expert evidence, it was notable that Dr Wright’s own document forensics and LaTeX experts were not called to give oral evidence, having largely agreed with the evidence given by COPA’s experts. The Judge followed, stating that because of the confidence he had in COPA’s expert’s findings, he accepted all findings of inauthenticity. As regards the LaTeX documents, there was metadata indicating the files were being manipulated in November 2023, which Dr Wright contended showed he was doing “demonstrations” in relation to those files. However, the Judge found that Dr Wright was “literally reverse engineering the White Paper LaTeX Files” from the Bitcoin White Paper to try and produce evidence that was compelling.

Relief

In his form of order judgment, handed down on 16 July 2024, Mr Justice Mellor ordered, amongst other things, that Dr Wright be subject to a worldwide anti-suit injunction, preventing him from initiating or threatening (either implicitly or explicitly) to initiate any proceedings in relation to his claim to be Satoshi. This followed powerful evidence from two individuals targeted by Dr Wright in separate defamation proceedings, Peter McCormack and Magnus Granath, detailing their harrowing experiences. The Judge also set aside a default judgment and related orders against COBRA, an anonymous person/persons against whom Dr Wright had brought proceedings for hosting the Bitcoin White Paper on Bitcoin.org.

Dr Wright may also be facing criminal charges following these proceedings. Following a request from COPA, the Judge stated that he would be referring Dr Wright and Stefan Mathews, the CEO of nChain (one of Dr Wright’s companies) and a witness for Dr Wright, to the CPS for consideration as to whether to bring perjury charges.

Analysis / Insights

The comprehensive nature of the judgment, combined with the declarations the Judge felt able to make immediately at the conclusion of the trial, demonstrates the robust way in which the English legal system is able to deal with complex litigation efficiently and do swift justice between the parties. The relief granted also reflects the court’s willingness to grant worldwide relief in appropriate circumstances.

Further, the outcome of these proceedings is an important result for the Bitcoin and wider cryptocurrency community, with Dr Wright’s campaign having a damaging impact on the continued development of Bitcoin by deterring developers from getting (or remaining) involved in Bitcoin’s development.