The chips are down – Bitcoin in the courts

In an unusual move, whilst we await the formal judgment, the judge decided to make an immediate declaration that Craig Wright is not the creator of Bitcoin – he also confirmed this in a follow-up judgment related to the worldwide freezing order that he granted -  Crypto Open Patent Alliance v Wright (WFO Application) [2024] EWHC 743 (Ch) (28 March 2024).

The COPA Claim

As discussed in our latest blog, Crypto in the courts – the Bitcoin cases Dr Craig Wright, an Australian computer scientist, claimed he wrote an article on Bitcoin using the pseudonym "Satoshi Nakamoto", and held various intellectual property rights as the author of the original Bitcoin source code.

Crypto Open Patent Alliance (aka "COPA") issued a claim against Wright primarily seeking declarations that (1) Dr Wright is not the author of the article entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" dated 2008, known as the "White Paper", (2) Dr Wright is not the owner of copyright in the White Paper; and (3) any use by COPA of the White Paper will not infringe any (potential) copyright owned by Dr Wright (the "COPA Claim").

Mr Justice Mellor indicated that the evidence was 'overwhelming' in the case that Craig Wright is not "Satoshi Nakamoto", the pseudonym for the creator of Bitcoin. For reasons that will be provided in the full trial judgment, Mellor J damningly held that Dr Wright had "forged documents on a grand scale and, during his cross-examination, he lied extensively and repeatedly".

Freezing Order

At this stage, the headline is that it is "undoubtedly the case" that COPA and the developers are the winning parties and will likely be awarded costs on an indemnity basis.

For the time being however, a £6million worldwide freezing order has been awarded against Dr Wright. The judgment helpfully summarises the key considerations for a freezing order. These include whether there is an arguable case, the risk of dissipation of assets and the wide circumstances such as potential harm to Dr Wright, likely damages at play and geographical scope.

Next steps

The COPA Claim is one of a number of interlinked cases involving Wright and his claims in relation to Bitcoin. With clarity on the identity issue, we await to see how the other Wright cases move forward, or whether they will simply fall away.

The cryptocurrency industry was hoping that these cases would fully review the application of copyright and database rights. For now, those issues remain a question to be decided, although the Bitcoin industry will be able to move forward free from Wright's claim of ownership.