MIAMI — Attorneys for Ira Kleiman and W&K Info Defense Research began to paint an unflattering portrait of Craig Wright, his business practices and interpersonal dealings in a Miami court on Tuesday and Wednesday.
These two days of testimony formed part of the plaintiffs’ suit against Wright, revolving around his business dealings with the Kleiman’s late brother, David Kleiman. The crypto community has been watching this case closely because much of the financials at the heart of the case revolve around bitcoin wallets that have been linked to Satoshi Nakamoto, the pseudonymous creator of Bitcoin.
Tuesday’s witnesses included former Bitcoin developer Gavin Andresen, who testified that Wright – the Australian computer scientist best known for his much-debated claim to be Nakamoto – “bamboozled” him.
In a prerecorded video deposition shown in court Tuesday, Andresen testified that he began to doubt Wright’s claim after Wright notoriously failed to deliver cryptographic proof that he had access to Satoshi’s private keys.
“I’m starting to doubt myself, and imagining the clever ways you could have tricked me,” Andresen wrote to Wright on May 3, 2016, in an email presented in court.
“The gobbledygook proof he published was certainly a deception, if not an outright lie,” Andresen told attorneys for Kleiman. “He bamboozled me, there.”
Andresen’s testimony was just a taste of what was to come on days two and three of the Kleiman vs. Wright trial, which is being closely watched because of Wright’s history of claiming to be the inventor of Bitcoin but failing to conclusively prove it.
If the plaintiffs win, Wright could be ordered to give them a portion of intellectual property rights and a share of up to 1.1 million bitcoins, worth $68 billion, that the plaintiffs claim Wright controls. Many in the crypto community, however, have called into question the existence of those coins and, if they do exist, whether Wright in fact controls them – and even if he does, whether the court will be able to force him to abide by the jury’s decision.
‘I never got a cent’
Jamie Wilson, director of the Australian cybersecurity company Cryptoloc, testified via pre-taped video deposition about his former business relationship with Wright.
Wilson told the plaintiffs’ attorneys that he met Wright in 2012 after learning about bitcoin in 2011, and accepted a director role in several of Wright’s companies, including Hotwire and Coin Exchange.
On Oct. 23, 2013, Wilson sent Wright an email resigning from his positions at four of Wright’s companies.
“I wasn’t feeling comfortable,” Wilson told the attorneys when they asked him his reason for resigning. “I didn’t like the way he went about business, his ethics and morals, the way he treated people.”
Wilson said he became suspicious of Wright when he noticed “a lot of bitcoin” and money that originated in the United States on company balance sheets. Concerned that the money was the result of a U.S. government contract he was unaware of, Wilson said, he took his concerns to Wright, who told him the money was from unspecified research and development activities.
When Wilson dug deeper into company records, he told attorneys, he found that the money originated at W&K – the entity plaintiffs say represented a business agreement between Dave Kleiman and Wright to mine bitcoin and develop intellectual property relating to blockchain technology.
Wilson said his suspicion was increased by Wright’s change in behavior and lifestyle after Dave Kleinman’s death in April 2013. Before Kleinman died, Wilson described Wright as driving “a very cheap car,” living in rental properties and wearing hoodies.
After Dave Kleinman’s death, Wilson described Wright’s newfound interest in “watches, flashy suits … a massive change in lifestyle.”
“His arrogance, believing he had to change himself, it just caused a lot of problems,” Wilson testified.
Wilson also said Wright never paid him – or any other employees at Hotwire – during the time period of Wilson’s employment.
“I did not receive one cent,” Wilson said. He added that he was never reimbursed for travel expenses or the down payment on a rental property for an office, and that Wright’s other employees were forced to borrow money from friends and family to stay afloat.
Wilson testified that he wasn’t expecting to receive a salary, however, and found out about his supposed $150,000 per year salary only when the Australian Tax Office (ATO) informed him he needed to pay taxes on it, because Wright had reported the payment.
“I never got a cent, anyway,” Wilson reiterated.
Ira Kleiman takes the stand
David Kleiman’s brother Ira, the personal representative of the Kleiman estate and plaintiff in this case, took the stand on Wednesday.
Ira Kleiman told the jury that he first met Wright in February 2014, about a year after his brother’s death, when Dave Kleiman’s friend Patrick Paige forwarded Ira an email from Wright (dated Feb. 12, 2014) discussing their alleged partnership to mine bitcoin.
A day after receiving Paige’s email, Ira reached out to Wright asking for more information about his brother’s purported involvement in the creation of bitcoin:
“Can I ask you if Dave played a part in writing the original PDF under the Asian alias?” Ira Kleiman wrote to Wright, in an apparent reference to Nakamoto’s seminal bitcoin white paper. “I have no interest in public attention from it. I just think that it would be cool if David played a part in creating something so incredible.”
The court then heard about two months of communication between Ira Kleiman and Wright, where the two discussed the role Wright claimed he and Dave played in the bitcoin’s creation.
“I had math skills and some coding that frankly was crud (better than some, but really),” Wright told Ira Kleiman in an email dated March 7, 2014. “Dave could edit his way through hell and back. I am not a team player. I am a terrible boss and a slave driver, but with Dave I was far more … Satoshi was a team.”
But in April 2014, the relationship between Ira Kleinman and Wright appears to have begun to sour.
Ira Kleiman showed the jury an email he received on April 15, 2014, from Andrew Miller, an employee of the Australian Tax Office, about Dave Kleiman’s estate.
Ira Kleinman told the jury that, through Miller’s email, he learned for the first time that Wright had sued W&K in an Australian court and that Wright told Australian authorities he had paid Dave Kleinman’s estate 40 million Australian dollars to “fund the projects” of W&K.
In the email, Miller asked Ira Kleiman a series of questions about W&K, including whether he was aware that Wright had taken legal action against the company in Australia, or that Dave Kleinman’s estate had purportedly received a bond worth 40 million Australian dollars from Wright to fund W&K’s projects.
Miller’s email also said there was a settlement agreement for the transfer of property from W&K to an entity owned by Wright, and that a then-21-year-old Vietnamese woman named Uyen Nguyen had been appointed director of W&K. Miller asked Kleiman if he had instructed Nguyen to accept the settlement agreement.
Kleiman told the jury that, at the time of Miller’s email, he was not aware of W&K and had never met or heard of Nguyen. He also said that the estate had received no money from Wright or any related entities.
On April 23, 2014, Kleiman reached out to Wright by email for answers. ”I feel like there are discrepancies in the contracts between you and W&K, such as Dave’s signature, his resignation, transfer of all accountable value, Uyen’s role of director, BAA projects, etc…I do believe we need to remedy the lopsided contractual exchange,” Kleiman wrote.
“From these documents, it appears clear to see a systematic transfer of assets out of W&K back to you. Up until April 15, I was a complete believer in what you were telling me,” Kleiman wrote in another email to Wright. “But you never mentioned any of the actions you were taking against W&K prior to contacting us.”
Attorneys for the plaintiffs showed the jury a contract allegedly signed by Dave Kleiman on April 2, 2013 – 24 days before his death – that gave Wright control of W&K’s assets.
The signature shown to the jury – crisp and slanted – differed vastly from prior signatures of Dave Kleiman’s, such as the one shown from his will, where he signed with a large, looping “D” followed by a scribble.
“That’s not my brother’s signature,” Ira Kleiman told the jury, referring to the signature on the contract.
Later that month, on April 29, 2014, Miller wrote another email to Kleiman, asking him to confirm the veracity of a contract from March 2014 filed with the ATO by Wright.
“It suggests that you acquired $10,500,000 worth of shares in an Australian company ‘Coin Exch’ Pty Ltd. Were you aware of this, and if so, in what form did you pay this share of capital?”
Kleiman told the jury he never bought shares of Coin Exchange.
Former nChain lawyer speaks
Jimmy Nguyen, a former attorney for nChain, the London-based company where Wright is chief scientist, also gave testimony about the nature of Wright’s involvement at nChain and his claims to be Satoshi Nakamoto.
Nguyen testified that Wright told him that he and Dave Kleiman both posted from Satoshi’s accounts.
He also testified that, in 2014, Wright claimed he had “more money than Rwanda.”
Wright is set to take the stand on Thursday.
UPDATE: Background information about the case was added to the first paragraph.
Source: Coin Desk