The saga of the Craig Wright phenomenon has no end. We knew that much. Now a dramatic new lawsuit has emerged led by Craig Wright, who nearly outright claims again to be Satoshi Nakamoto. In a lawsuit filed with the High Court in London, Wright is suing BTC Core, a partnership that includes developers and Square Up Europe Ltd, for a staggering $1.1 trillion.
The case centers around allegations of “wrongful passing off” and fraudulent misrepresentation, accusing BTC Core of misleading the public by representing itself as the original Bitcoin, despite making significant protocol changes that deviate from Satoshi Nakamoto’s 2008 vision.
The Lawsuit ‘s Core Allegations
Wright’s lawsuit specifically targets BTC Core for altering the original Bitcoin protocol, a system Wright asserts remains intact only in Bitcoin Satoshi Vision (BSV). The changes in question include modifications like Segregated Witness (SegWit) and Taproot, introduced to the BTC blockchain. These updates, according to Wright, have transformed BTC into a speculative asset, far removed from its original purpose as a “peer-to-peer electronic cash system,” as outlined in the Bitcoin White Paper.
The core of the lawsuit is that BTC Core, by making these changes, has misled investors and the public, creating confusion about what truly constitutes “Bitcoin.” Wright contends that this misrepresentation has damaged the reputation and market value of BSV, the blockchain he claims faithfully follows the original Bitcoin protocol. He is seeking financial redress for these damages, estimating that BTC’s actions have caused billions of dollars in market losses and reputational damage.
Wright, who is understood to be representing himself, has put forth an extraordinary claim, alleging that the market capitalisation of BTC far exceeds that of BSV, with BTC valued at $58,000 per unit at the time of the claim perhaps, compared to $65 per BSV unit. The lawsuit estimates total damages of $1.1 trillion, calculated based on the financial and reputational impact of BTC’s alleged misrepresentation.
Key Legal Grounds
At the heart of Wright’s legal case are charges of fraudulent misrepresentation and passing-off, both significant under English law. Wright argues that the changes made by BTC Core amount to more than just technical tweaks. They constitute a deliberate deception, allegedly. He claims that BTC’s developers have misrepresented BTC as the continuation of Bitcoin, misleading users and investors to believe they are dealing with the original Bitcoin when, in Wright’s view, that title belongs to BSV.
The principle of “passing-off” is central to this argument. Under this doctrine, businesses are prohibited from misleading consumers into believing they are purchasing one thing when they are actually receiving something entirely different. Wright’s team will assert that BTC Core has effectively “passed off” a modified system as the original Bitcoin, resulting in confusion and economic harm.
In this case, Wright claims that BTC, by introducing modifications such as SegWit and Taproot, no longer follows the original Bitcoin protocol as outlined in the Bitcoin White Paper and should not be considered Bitcoin. However, this argument is complex because Bitcoin, as an open-source project, allows for community-driven changes. There is precedent for forks and changes in blockchain projects, as seen with Bitcoin Cash and Bitcoin SV. BTC’s development decisions have been accepted by the majority of the network, which continues to recognize it as the “original” Bitcoin.
Therefore, proving wrongful passing off may face significant challenges, particularly if the defense argues that changes were implemented through consensus among the stakeholders and do not violate Bitcoin’s core identity.
Consumer Protection & Money Laundering Allegations?
In addition to charges of misrepresentation, Wright is accusing BTC Core of violating consumer protection laws. More specifically, the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). He claims that by falsely promoting BTC as Bitcoin, BTC Core has engaged in misleading commercial practices that have distorted the choices of investors and consumers.
The success of this claim hinges on proving that an average consumer could be misled into thinking that BTC, despite its changes, remains unaltered and that these changes are significant enough to be considered deceptive. However, as long as BTC has maintained transparency about its updates and changes, this claim might face difficulties.
Perhaps most explosive is Wright’s claim that BTC Core’s changes to the Bitcoin protocol have facilitated money laundering. He alleges that modifications such as SegWit and Taproot, which enable off-chain transactions through technologies like the Lightning Network, have allowed for anonymous and untraceable transactions, effectively enabling illegal activities like money laundering. According to Wright, these modifications stand in direct contrast to Bitcoin’s original design, which emphasized transparency and accountability.
Features like SegWit (which moves signature data out of the main transaction block) and Taproot (which enhances transaction privacy) indeed increase user privacy, but it’s a stretch to argue that they were designed with illegal activities in mind. Privacy-enhancing technologies are common in cryptocurrencies, and their presence alone does not equate to the facilitation of money laundering unless specific evidence is provided that these features were explicitly used for this purpose. BTC Core may argue that their changes are aligned with privacy and scalability goals, not criminal intent.
Wright’s Request for Court Intervention
Beyond seeking monetary compensation, Wright is asking the court for a declaration that BTC Core’s conduct is misleading and damaging. He hopes to restore what he sees as the true understanding of Bitcoin’s identity, with BSV recognized as the legitimate continuation of Bitcoin, and to prevent further misrepresentation.
This lawsuit stands out not only for the jaw-dropping sum of money at stake but also for its potential to reshape the public perception of Bitcoin. A victory for Wright could have profound implications, solidifying a divide between Bitcoin’s various iterations and potentially boosting BSV’s position in the market.
High-Stakes Battle
Dr. Craig Wright’s new lawsuit against BTC Core is yet another significant legal challenge in Bitcoin’s history. The case involves allegations of fraudulent conduct, misrepresentation, consumer protection breaches, and money laundering, raising the stakes for both parties involved. However the outcome of this lawsuit could not be more clear. It comes from a disgraced individual who has been found to be lying to court and fabricating evidence to support his claim. This will not be a trial to reshape the future of Bitcoin or alter the trajectory of the ecosystem.
However, with an estimated $1.1 trillion in damages at stake, the trial promises to be a high-stakes legal drama that will fuel fresh debates. Regardless of the outcome, one thing is certain. As absurd as this might be, we will have to hit the popcorn hard, again…
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- Lucy Walker covers finance, health and beauty since 2014. She has been writing for various online publications.
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