Part 3: Legal Disputes and Drama - Craig Wright's Continuing Bitcoin Controversy

*Where a fact is commonly known or widely reported, we do not cite a source. On the whole, sources are only listed where facts are specific, arguable, or otherwise notable.

This is the final part of this three-part series exploring Craig Wright’s claim that he invented Bitcoin.

In part one we explored Wright’s childhood and career leading up to when he first started claiming to be Satoshi Nakamoto — Bitcoin’s pseudonymous inventor.

In part two, we examine the ATO investigation into Wright’s companies, his ‘outing’ as Satoshi by Wired and Gizmodo, and how the world reacted to evidence that Craig Wright was Satoshi Nakamoto.

And in this final part, we explore Wright’s various attempts to prove his claim to be Satoshi Nakamoto, and how the world responded to these claims.

Part 3.

23: A New Life In London

Thanks to the quick thinking of Stefan Matthews and Ramona Wright, Craig Wright managed to escape from the ATO investigators in Sydney. After a brief stint in New Zealand, he and Ramona arrived in London in time for Christmas, 2015.

Wright’s financial backers — Stefan Matthews and Rob MacGregor — were not impressed.

“You know Craig has gone out and bought himself some cars?” Matthews told O’Hagan. “One hundred and eighty thousand dollars’ worth of cars. One of them stands out like the dog’s balls in the proverbial moonlight, and this is from the man we’re trying to keep fucking secret. How many custom BMW i8s are going around London? He’s spending every fucking penny that we’ve paid him ... Does he think this is just a game?” (For reference, an i8 is technically a supercar, and a floor model costs about $125,000).

A BMW i8, the car Wright reportedly bought upon arriving in London. Source: Yahoo.

“You know, these guys have gone from being backyard scrappers and they’ve suddenly found themselves in a high-stakes poker game,” he said, adding that if Wright didn’t fall in line, he’d find himself on a plane back to Australia. “The people that I work with are capable of deciding this was a $30 million bad decision and write it off.”

Oxford Street, London. Source: Hotels.com.

Wright’s interpersonal skills apparently led to constant friction among the workers at his new company, especially among new members of staff who hadn’t worked with Wright before. “When I’ve got new people here,” Pederson said, “I have to train them how to talk to Craig. That’s what I have to do. Sometimes, he can’t explain things and this is where the anger comes from.”

“He’s constantly telling you something. He’s like Steve Jobs, you know – only worse.”

Pederson was acutely aware of how MacGregor and Matthews had forced Wright into a corner, but also how Wright had deluded himself into believing he might be able to take Matthews’ and Macgregor’s money without proving he created Bitcoin.

“They can’t just sign all these papers and think it’s going to be alright, that they’ll sort something out. It doesn’t work that way. They now have to go to the end and live with it. But they’re doing it on first class. When this Satoshi thing comes out I can see a lot of bad things happening, and they are not geared up for this, any of them,” Pederson said.

“He’s now in this box, he can’t move, he can’t do anything, and this box is getting smaller and smaller.”

Pederson’s opinion on whether Wright actually wanted to be ‘outed’ as Satoshi, however, differs from almost everyone else, including Wright himself. When asked directly whether he thought Wright wanted to be outed, he said, “Yes I do. It's in his personality. He wants to be recognised. He says too much. After two weeks of working with him, I knew.”

Ramona, however, didn’t want Wright to tell the world ‘the truth,’ according to Pederson. “He and Ramona tell me they had a pact never to come out,” he said. “My feeling is that she doesn’t want him to come out, but he does. He’s been pushing for this to happen.”

This of course fits quite snugly with what Wright’s mother told journalists about his character: that he exaggerates the truth in order to shock and impress others, and often gets carried away with his stories.

We ought to consider here whether Satoshi really would have told so many people that he invented Bitcoin in person, while simultaneously taking several technical steps to hide his identity online. What would be the point of hiding his identity in one sphere while being completely open about it another?

24: The First Satoshi Proofs

Throughout the holiday season of 2015, while the Wrights were settling into London, Matthews and MacGregor put in motion their plan to reveal Craig as Satoshi Nakamoto.

Their game plan was fairly straightforward: introduce Wright to some journalists and have him sign a series of messages using Satoshi’s private keys in their presence, thereby proving his claims.

The two men hired a PR firm who convinced journalists from the BBC, the Economist, and GQ to meet Wright in their London office and take part in the message verification. The journalists all signed NDAs which prevented them from writing about their experience until a later date in exchange for shared rights to the exclusive story.

Before Wright met the journalists, however, he first had to win over Gavin Andresen, a computer scientist who took the reins of Bitcoin’s development after Satoshi disappeared in 2011.

Gavin Andresen, Bitcoin lead developer. Source: Crypto France.

Wright’s backers believed that if Andresen believed Wright’s claims, he would convince the rest of the crypto community that Wright was Satoshi. That was the idea, anyway.

Wright appeared anxious, almost frantic. “He knew this was it,” MacGregor said. “He knew that they would believe Gavin…that he would have no plausible deniability after he’d talked to Gavin and shown him the keys.”

Andresen and Wright spoke for six hours about Wright’s companies and his thoughts on Bitcoin’s direction, as well as the research projects he and his new research staff were working on. At 5:30pm, Wright logged on to his computer and signed a message with a key which only the real Satoshi could have. Andresen was momentarily stunned, but not completely convinced.

“I need to test it on my computer,” he said, implying that Wright could have somehow fiddled with the software to make it look like he was in control of Satoshi’s keys when he really wasn’t. For his own peace of mind, and to help prove Wright’s claims, Andresen insisted on testing the key on a laptop Wright didn’t own.

It was then Wright’s turn to be stunned. In his mind, he had proved beyond any reasonable doubt that he was Satoshi, but he was now being asked to jump through yet another series of hoops — by a man with whom he had spent the past six hours on how he had invented Bitcoin.

“I had vowed never to show the key publicly and never to let it go,” Wright later said. “I trusted Andresen, but I couldn’t do it.”

The problem, Wright explained, was that he didn’t trust anyone else to have a copy of the key on the computer or memory stick, even momentarily. He was paranoid that someone could steal it, thereby stealing his proof that he invented Bitcoin.

“Maybe you and I could get to know each other better,” Wright said to Andresen. “Like, trade more emails, and I can sign more messages to you.” Andresen nodded in agreement. It looked for a moment that Wright wasn’t going to prove his claims after all — that he was backing out at the last hurdle.

The atmosphere in the room turned cold. Matthews and MacGregor were furious.

“It was the only time during all the years that I thought: ‘Jesus Christ, has he been spinning us the whole time?’” Matthews said after the meeting. He and MacGregor agreed that Wright’s behavior was childish and borderline insane. But Wright argued that he was just being careful. He told O’Hagan that Andresen could be a plant or a spy who intended to steal his private keys.

The crux of the disagreement then was that Wright insisted the message never touch a computer he didn’t own. While Andresen insisted on verifying the message on a computer Wright and his associates hadn’t touched.

It was Macgregor who eventually solved the issue. He sent his assistant out into Covent Garden to buy a brand new laptop which both men could check hadn’t been tampered with. Wright and Andresen connected to the hotel’s WiFi and downloaded the software necessary to authenticate Wright’s private keys.

Once again, Wright had everything he needed to prove his claims. And again he tried to back out, despite the brand new laptop and a room full of expectant people waiting for him to put his money where his mouth is.

MacGregor and Matthews furiously reminded him of the terms of their deal. They dangled the Australian ATO and prison over his head like a Damoclean sword. But even then, Wright still couldn’t go through with the proof.

He left the room to speak with his wife Ramona on the phone. “Do it,” she said.

Wright returned to the conference room and finally agreed to sign the message. He opened the new laptop and the Satoshi wallet and tried to sign a message to Andresen.

It failed.

“During all that time,” Andresen later recounted, “it was obvious Craig was still, even then, deeply hoping his secret identity could remain secret. It was emotionally difficult for him to perform that cryptographic proof.”

Wright tried again and again to verify the message until Andresen pointed out the message was different from the original — he had left out his initials from the end: CSW.

When Wright added his initials to the message, it was verified. For the first time, at least in theory, Wright had proved that he held Satoshi’s private key. Andresen shook Wright’s hand and said he was convinced; Wright tearfully thanked him for his work on the project.

“Craig broke down,” MacGregor later recounted. “He said he thought he’d never have to do this. He said he never knew how to trust people in his life.”

25: The Public Satoshi Proofs

Wright expected these proof sessions to be easier and more straightforward, now that he had already proved his claims once. He didn’t expect, however, to have his claims tested by an academic cryptographer who, unlike Gavin Andresen, wouldn’t be easily won over.

Before we dive into what happened, we should reflect on why Wright, Matthews and Macgregor chose to reveal Wright in this private, secretive way: by showing journalists (who don’t possess a deep understanding of cryptography) cryptographic proof in private, rather than revealing a publicly verifiable proof.

Because there were various ways Wright could have proved his claims publicly: by sending an email from Satoshi’s email address; posting cryptographic proof online for anyone to verify; or even by moving some of Satoshi’s Bitcoin. Any of these actions could have been publicly verified, and would have vindicated Wright, proving his claims beyond any reasonable doubt.

But Wright and his associates chose another path — one shrouded in mystery. They fed bits of evidence to journalists piece-by-piece over a matter of weeks, and offered little in the way of publicly verifiable cryptographic evidence — evidence that would have won over even the most hardened non-believers.

Why wouldn’t Wright provide simple, verifiable proof?

Wright had a big problem with this last requirement. As he had repeatedly stated when he met with Andresen in the Covent Garden hotel, he didn’t want anyone taking away a copy of any message he signed in order to verify it.

So, in spite of promising to copy each signed message for the journalists onto memory sticks, there wasn’t anything on the memory sticks bearing any relation to Satoshi’s keys.

It’s not clear why Wright would do this if he actually was Satoshi, given that it’s not possible for someone to steal Satoshi’s private keys from a signed message. What was Wright really afraid of?

Did he botch the evidence because he couldn’t provide real proof?

Or, as he claims, was he fighting back against Matthews and MacGregor, who were trying to force him to ‘out himself?’

*

The atmosphere was tense. It was clear to those in the room that Wright was hating every second of the session. He didn’t want to jump through hoops for anyone, journalists included, even though his representatives had invited them to be there. He behaved as if answering their questions was somehow humiliating.

Despite his belligerent demeanor, Wright did reportedly sign a series of messages using the private keys for blocks 1-9 of the Bitcoin blockchain, including one Satoshi used with Hal Finney.

The BBC journalists hadn’t brought any cryptography experts with them, so Wright had to explain what he was doing at every stage. These proofs were never shared publicly, so it’s impossible to verify whether they actually happened.

Once Wright finished signing the messages, he modestly compared his priving his claims to Sartre turning down the Nobel prize. “He gave up the prize,” Wright said, ‘because ‘If I were to accept it, I’d become the institution.’ I never wanted to sign Craig Wright as Satoshi. I haven’t done this because it’s what I wanted, I just can’t refuse it.”

“In what way have you been forced into it?” Cellan-Jones asked.

“I’ve got people mudslinging,” Wright said, referring to journalists and cryptographers who had disputed his first round of proof. He neglected to mention the deal he’d made with Matthews and MacGregor: that they would buy his companies and pay off his debts and fines in exchange for him coming out as Satoshi, as a reason for his revealing himself as Satoshi.

This fact was also absent from the subsequent interviews and proof sessions with the BBC and the Economist. All the journalists from all three proof sessions believed Wright was providing cryptographic proofs of his own accord; they had no idea he had been paid to do so.

The BBC journalists then asked Wright why he wanted to be the public face of Bitcoin and, in reality, the entire cryptocurrency space. “I don’t want to be the public face of anything,” Wright said.

*

Just like in the previous proof session, Wright signed a message for Siegele from block 9 of Bitcoin’s blockchain. The journalist responded with a look of perplexion, and said “I’m sorry, but I’m still a little unsure what that proves.”

“It proves I have the private keys,” Wright said. “All the original private keys.” For reference, even if Wright had signed this message, as he claims to have done, it would not have proved he controlled “all” of Satoshi’s private keys.

Siegele, however,  didn’t push the point any further, and moved on to another line of inquiry. “Why now?” he asked.

“I’ve tried to avoid the media, but it’s starting to affect other people. I’d prefer to stay quiet,” Wright replied. “Why now? I have staff, I have family ... All the innuendo, the falsehoods.” Again, Wright is referencing the people who disproved the original proof package leaked during the previous summer.

*

Dr Nicolas Courtois. Source: YouTube.

GQ wanted Wright to present and explain his evidence to McGurk, and brought Courtois along to check the evidence and ask Wright to explain his proof.

“It actually went quite well,” Wright said after leaving the meeting. “The journalist was nice, but he brought along this complete wanker of an ‘expert’,” referring to Courtois.

Roughly eight minutes into the session, after seeing the same proof Wright showed to the BBC and Economist journalists, Dr Courtois suggested the messages Wright claimed to have signed with Satoshi’s private keys were “inconclusive.”

Wright hit the roof.

“You've got this one thing," said Wright. "If you don't like it, then fuck off."

The PR team, who had put up with Wright’s antics for the past week, can be heard groaning in the background of the recording.

Dr Courtois pointed out that the evidence Wright had presented could easily have been compromised or stolen.

It seemed that Wright was thoroughly unprepared to deal with someone who understood cryptography and Bitcoin. Needless to say, he handled the situation with the grace and dignity his colleagues had come to expect of him.

“No more bullshit. Fuck off!” Wright howled as he stormed out of the conference room.

After a short interlude, Wright returned to the conference room. Courtois began, “I'm not saying your evidence is invalid, but it's just one thing, I'm saying there are other sorts of evidence that people could ask from you, because it's just one thing…”

Moments later, Wright began shouting again.

It’s difficult to make out all of what Wright says on the recording, but some audible snippets included, “there are fucking thousands of transactions on Bitcoin every fucking day signed with pissy fucking bloody number generators,” and “If I hear one more bullshit comment about how I can do it with unknown nodes, you show me proof or you fuck off out.”

Once Courtois left the meeting with Wright, the mood settled down. McGurk had a chance to question the man behind the proverbial mask and try to understand how he came to invent Bitcoin. His first question mirrored Sielege’s from the Economist: why come out now?

Wright’s answer was different from those he gave during the previous two proof sessions. “I don't want to come out," said Wright. "But people in my organization keep going, ‘We've got to do this’.” This was the first time Wright claimed publicly that he was being ‘forced’ to out himself as Satoshi.

“What organization?” asked McGurk.

“I have a nice big organization,” Wright said. “We have offices in different locations, including London. No one knows who the fuck we are, and I like that.”

It’s not clear which organization he’s referring to here. It’s possible he means nCrypt, the company MacGregor set up for him the previous month, but at the time it only employed a handful of employees in London. He could have been implying that MacGregor’s company — nTrust — was his company. He might also have been flat out lying.

“At the end of the day,” he continued, “there is a company, people working for me. There are about 30 people here in London. They don't want to be known. Not because they don't want to be seen with me, but... because...because this is what they do.”

McGurk then asked about Wright’s supercomputer which, according to SGI — the company who supposedly helped him build it — doesn’t actually exist. Or at least if it does, they didn’t help him build it.

“I don't want to talk about where it is... it's not in Australia,” said Wright. McGurk asked whether it was in Iceland. “If I answer that question I get in big trouble," he said. "People are going to go, ‘Craig, you're not supposed to talk about those things.’” Once again, Wright dodges a question about his background by hiding behind shadowy interests and investors.

McGurk’s lasting impression of Wright, he said, was one of inconsistency. Given Wright’s claimed wealth of half a billion US dollars, McGurk notes how strange it was that he boasted about his car (the BMW i8) and the restaurants he ate in.

Two days later, Dr Courtis emailed Stuart McGurk.

“Stuart," he wrote. "Craig has cheated us. It is a hoax. I have proof.”

Courtois acknowledged that Wright had the skills to have created Bitcoin; he had been at all the right conferences, and he knew most of the right people. Even so, Wright’s proof didn’t pass muster, he said.

What Dr Courtois discovered was that rather than signing a new transaction, Wright signed an old transaction Satoshi carried out many years before, and presented it like it was a new transaction.

What Wright should have done, Courtois said, is move some of the first Bitcoins Satoshi mined. Only Satoshi could have done this. But Wright argued he didn’t need to, because signing one of the blocks showed he had access.

In his defense, Wright said, “It would be like I've stolen the Mona Lisa, put it on my wall, took a couple of pictures, then put it back.” It feels almost silly to point out that someone taking a picture of the Mona Lisa hardly proves they own it. Also, Wright’s analogy seems to imply he stole Satoshi’s keys. Nevertheless, that was his defense.

26: The Embargo Lifts: Satoshi Goes Live

At 8am on May 2, 2016, the embargo lifted on ‘the signing sessions,’ and all around the world, news broke that Craig Wright had finally proved himself to be Satoshi Nakamoto.

Articles from the BBC and the Economist went live at exactly 8am, as did a blog post by Gavin Andresen in which he explained the proof Wright showed him. Wright also published his own blog post wherein he attempted to provide further cryptographic evidence of his Satoshi claims.

BBC News article on Wright’s proof session.

The Economist’s piece on Wright’s proof session.

GQ’s piece on Wright’s proof session.

Gavin Andresen’s blog post backing Wright as Bitcoin’s creator.

“After spending time with him I am convinced beyond a reasonable doubt: Craig Wright is Satoshi. Part of that time was spent on a careful cryptographic verification of messages signed with keys that only Satoshi should possess. But even before I witnessed the keys signed and then verified on a clean computer that could not have been tampered with, I was reasonably certain I was sitting next to the Father of Bitcoin.”

The ‘Sartre’ proof, posted to Craig Wright’s blog.

“If I sign myself Jean-Paul Sartre it is not the same thing as if I sign myself Jean-Paul Sartre, Nobel Prizewinner,” was Sartre’s quote.

“If I sign Craig Wright, it is not the same as if I sign Craig Wright, Satoshi,” was Wright’s version.

27: Faketoshi?

Wright’s Sartre proof was apparently debunked by 10am, just two hours after it appeared online.

Several of those in the crypto community who debunked Wright’s claims pointed out that Satoshi had shunned the mainstream media and conversed almost exclusively with the Bitcoin community. He didn’t give quotes to journalists or write lengthy, verbose blog posts. Whereas Wright, on the other hand, did the complete opposite: he fought against cryptographers and the crypto community and tried to wield the media to prove his claims.

What’s more, almost nobody was won over by Wright’s refusal to ‘jump through hoops,’ as he put it. Simply because signing a new message using a private key requires a tiny jump through a very large hoop. It’s simply not a difficult or even time intensive task.

It seems then that Wright’s plan was to forge a signature, but only present it to non-expert journalists who he could convince of its authenticity, and then denounce anyone who proves him wrong as misguided and uninformed.

But when he was forced to publish that proof so it could be independently verified, his plan fell apart.

One question that looms over the proofs from Wright’s various signing sessions and online proofs, however, is how Gavin Andresen fell for it?

He’s a cryptographer who worked with Satoshi directly and has intimate knowledge of Bitcoin. Wouldn’t he have noticed that Wright was signing an old transaction already on the blockchain?

*

Wright must have realized that his ‘proof’ wasn’t going to convince anyone familiar with Bitcoin who had time to check whether he was signing an old transaction, or cryptographers and blockchain developers familiar with private keys. They would quickly realize what he’d done.

“How did they change it?” O’Hagan asked.

Wright couldn’t answer that question, so O’Hagan asked him to explain why he fudged the proof.

“I cut and pasted something just for the time being but knew I would change it later,” he said. “But then it went up.”

One tangential issue for Wright here is that there’s no way to square his fudging the evidence with his claimed desire not to be in the media. If he wanted people to leave him alone, his best bet would have been to just provide the proof and then buy an island somewhere and disappear forever.

But instead, by botching his evidence, he became one of the world’s most infamous figures practically overnight. Those quickest to denounce Wright were of course the experienced crypto figures, some of whom were sharing a stage with Gavin Andresen shortly after the embargo lifted and the news went live. Needless to say, they weren’t impressed that Andresen had elected to publicly back Wright.

Vitalik Buterin, Ethereum’s co-founder, listened quietly while Andresen explained to an audience at the Consensus 2016 event why he believed that Craig Wright was Satoshi. Buterin and the audience were momentarily stunned by what Andresen was saying. How could this man — who literally led the Bitcoin developer team for years, and who actually knew Satoshi — have been hoodwinked by Craig Wright?

Vitalik Buterin speaking at the Consensus 2016 conference.

“He [Wright] had the opportunity to take two different paths of proving this. One path would have been to make this exact proof, make a signature from the first Bitcoin block, put the signature out in public, make a simple 10-line blog post, so that Dan Boneh would be convinced and verified.... he would let the cryptographic community verify this.

But instead he has taken this path where he wrote this big, long blog post with 200 lines that’s so confusing that even Dan Kaminsky said is too confusing, and tried to only show that signature to a few select people, and we’re supposed to trust him.

In general, signaling theory says that if you have a good way to prove something and you have a noisy way to do it, then the reason why you picked the noisy way was because you couldn't do it the good way in the first place.”

28: Fallout

The day after the embargo lifted — May 3, 2016 — the media started reporting on the changing sentiment towards Wright and his proof. The news sites that picked up the story almost universally acknowledged the shift in feeling against Wright that occurred over the previous twenty-four hours, thanks to his evidently forged proofs.

The article more or less does what it says on the tin: its authors, Jordan Pearson and Lorenzo Franceschi-Bicchierai, dismantle Wright’s new package of evidence piece by piece. They found that “despite new evidence, Wright still hasn't done the one thing that would definitively prove that he is Satoshi Nakamoto,” i.e., signing a message using Satoshi’s private keys.

Motherboard’s piece rubbishing Wright’s new proofs.

TechCrunch piece questioning Wright’s claims.

Upon arriving at their office, he found the two men “hunched over the desk, exhausted and shellshocked.” MacGregor explained that Wright “got cute with the math,” and that “he has been trying to get consent from the trustees to get the private keys.” Once again, Wright changed his story.

He claims here that he didn’t control Satoshi’s private keys — instead, they were held in a trust controlled by other people who didn’t give their permission for him to use them. This could be interpreted as an admission that he didn’t invent Bitcoin after all, as by his own admission he didn’t have Satoshi’s keys.

Wright’s new explanation raised more questions than it answered. Which trust is he referring to — the Tulip Trust, or some other new trust? Can he prove that the keys are stored there, or that this trust even exists? Furthermore, why do other people control the keys in the first place? And why wouldn’t they give their permission for him to use them if he was as central to Bitcoin’s development as he says he was?

Wright, of course, still hasn’t answered any of these questions.

MacGregor then tried to convince O’Hagan that a signed message could be used for nefarious purposes if someone had enough computing power. He also said the trustees didn’t want anyone analyzing the early blocks, which is odd considering Bitcoin’s blockchain is public and thereby visible to anyone.

These explanations don’t really explain anything. It’s almost impossible that someone could use a signed message for nefarious purposes: there are plenty of signed messages out there already, so why wouldn’t these malicious actors use those? Additionally, there’s no logical explanation as for why the trustees wouldn’t want anyone analyzing Bitcoin’s early blocks.

We can only assume that it was Wright who provided Macgregor with these explanations. Judging by the sheer number of alternative explanations he provided, and how none of them could be proved, Wright could be saying anything to appease his investors so they didn’t put him on a plane back to Australia.

MacGregor also said the PR company who handled Wright for him wouldn’t deal with him anymore, and the investment bankers who were initially interested now weren’t picking up his calls.

Surprisingly, MacGregor told O’Hagan that he still believed everything could be kept on track. He had apparently spoken to the trustees (he didn’t reveal who they were) and had verbal confirmation from them that Wright could move some of Satoshi’s Bitcoin in order to turn things around.

If Wright managed to actually provide Satoshi’s private keys, as he had clearly promised MacGregor he could, it would have constituted ‘extraordinary proof’, and would have silenced even his most fervent doubters.

29: Extraordinary Proof

Wright was caught between a rock and a hard place.

On the one hand, he desperately needed to prove that he’d been telling the truth, otherwise he could find himself on a plane back to Australia and possibly to jail. But on the other hand, he clearly couldn’t provide this proof, and he needed to do something to get Matthews and MacGregor back onside, and the media off his back.

Wright’s blog post promising ‘extraordinary proof.’

Wright reiterated that moving some early coins wasn’t enough to prove his claim, and that he would post a “series of pieces [of evidence]” that would “lay the foundations for this extraordinary claim.” These would include “independently-verifiable documents and evidence” that Wright argued would address the “false allegations” that had been leveled against him.

Wright ended the post saying, “I will present what I believe to be ‘extraordinary proof’ and ask only that it be independently validated.”

And so, for the next twenty-four hours, the crypto community held its breath.

The following day — May 4, 2016 — Wright was at home with Ramona and Stefan Matthews, preparing to move some of the early coins as part of his extraordinary proof. Andresen had been invited to witness the event and be the person who received the coins from Wright. It was expected that he would independently verify that they had been sent from one of Satoshi’s wallets, and help vindicate Wright.

Gavin Andresen, Bitcoin lead developer. Source.

The first sign of trouble was when Wright shared with Andresen some ‘concerns’ over email about a potential security flaw in the early blockchain which would make it ‘dangerous’ for him to move the coins, and open him up to being exploited. Andresen, who helped develop Bitcoin during the early days, assured Wright (again over email) that there was no security flaw. But Wright wouldn’t have it.

Knowing Andresen was now on his way to the house to verify his proof, Wright panicked and disappeared upstairs. MacGregor — obviously concerned that Wright would try to back out of providing the ‘final’ proof — sent someone upstairs to check on him. They found Wright covered in blood.

During the same evening, Wright sent O’Hagan a link to a news article titled, “UK Law Enforcement Sources Hint at Impending Craig Wright Arrest,” which suggested he, Wright, would be liable for any and all criminal activity related to Bitcoin if he proved he was Satoshi.

By sending this article to O’Hagan, Wright seems to have implied that he deliberately botched the proof in order to avoid criminal prosecution, marking another narrative branch added to the tree of Wright’s ever expanding story.

The question of who created the fake article, and why they wrote it, remains a mystery. But it’s intriguing that a piece of evidence that gave Wright the perfect excuse not to prove his claims appeared for a brief window of time, and only to one journalist, only to vanish forever without a trace.

When O’Hagan queried Wright about the piece and what it meant, Wright said, “I walk from 1 billion or I go to jail. I never wanted to be out, but if I prove it, they destroy me and my family. I am the source of terrorist funds as Bitcoin creator or I am a fraud to the world. At least a fraud is able to see his family. There is nothing I can do.”

For reference, it’s incredibly unlikely that Satoshi would ever be prosecuted for how Bitcoin users spend their cryptocurrency, for the many of the same reasons that gun manufacturers aren’t legally liable for crimes committed with their products.

*

The following day, Wright capitulated. He either couldn’t or wouldn’t share the proof necessary to validate his claims, and he threw in the towel.

“I believed that I could do this. I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot.”

Wright and Ramona met with O’Hagan in a cafe the next day. Wright looked as if he hadn’t slept: unshaven, pale, and empty-looking. His hands were trembling. He and Ramona discussed with O’Hagan what they considered to be their impossible situation. “Now we’re stuck,” Ramona said. “You come out – you go to jail. You don’t come out – you’re a fraud. It’s got to the point where it’s almost better if he’s a fraud.”

This was the first time Wright claimed that his being labeled a fraud was all part of his master plan, and which enabled him to dodge jail for having created Bitcoin

Again, we should point out here that Wright would likely not have been prosecuted for any crimes related to Bitcoin had he proven his claims. If he were, it would have set a legal precedent where other crypto founders — like Vitalik Buterin, Gavin Wood, and Charles Hoskinson — could be prosecuted for any criminal activity on Ethereum, Polkadot, or Cardano.

Wright made clear to O’Hagan that he felt he had reached the end of the road. He wouldn’t offer any more proof, and he certainly wouldn’t interact with the media any more.

O’Hagan asked Wright why he fudged the proofs in the first place. “I gave them the wrong thing,” he said. “Then they changed it. Then I didn’t correct it because I was so angry, which was stupid. I put up the wrong one. No one wants Satoshi Nakamoto. I will never be Satoshi Nakamoto.”

Ramona then desperately tried to strongarm O’Hagan into telling their version of events when he eventually published his article. “She said that Craig would go to jail or harm himself if I told everything I knew,” O’Hagan wrote, stunned.

Wright apparently became very upset, and said “the Brits have their equivalent of Guantánamo Bay as well. I’ll never write, I’ll never see anyone. I’ll be in a little room. I won’t even have a pen and paper. I won’t see my wife again.”

O’Hagan suggested the couple seek crisis management advice from a therapist.

“We don’t have time for that,” Ramona said.

*

A week after the proof sessions were made public, Wright’s reputation and career lay in tatters. His corner office at the nCrypt offices on Oxford Street had been emptied out and repurposed as a conference room.

According to Matthews, Wright’s office, house, job, and work visa were all “set to go.” He and MacGregor had wasted $15 million on Wright, and felt they had missed out on a billion dollars in profit thanks to his antics.

Wright, however, was allowed to keep working on his patents at nChain.

Despite all the chaos and the lies, MacGregor, Matthews, and their financial backers decided they didn’t want to cut their losses with Wright. They decided to double down.

30: Lurking in the Shadows

Throughout the year after the ‘signing sessions,’ Wright shifted his work focus to Bitcoin’s scalability problem.

The scalability problem, in short, stems from Bitcoin’s small block size, which severely limits the number of transactions the network can process per second. This leads to long waits for transactions during busy periods, which threatens to undermine Bitcoin's feasibility as a currency for micropayments.

There are two visions for solving this problem.

(1) Developers could increase the block size and allow for more transactions per block. This would cause Bitcoin’s blockchain to rapidly grow in size, from the 450GB or so that it is now to several hundred terabytes in a matter of years.

Given that mining requires you to download the entire blockchain, larger blocks and a larger blockchain would prohibit many people from mining, and could result in a scenario where only large corporations with supercomputers can afford to mine Bitcoin.

(2) Developers could keep the block size small by allowing small transactions to happen off chain using layer-2 protocols like the Lightning Network.

Both (1) and (2) had their fair share of supporters. At the time, the debate about which direction Bitcoin should move in was fraught with anger and spite. It eventually became clear that neither side would budge, so the Bitcoin blockchain forked, meaning it split into two distinct chains.

Wright, Gavin Andresen, and a handful of others argued that (2), a big block solution, was the better option. They pointed out that Satoshi himself once said that Bitcoin’s block size would have to be increased, although he didn’t say by how much, and it’s not clear he would have supported mining power being concentrated into the hands of wealthy and powerful corporations.

When it became clear that (2) was losing the ideological battle, Wright set about making his own version of Bitcoin, which he called ‘Bitcoin Satoshi Vision,’ or BSV.

BSV went a lot further than Bitcoin classic and other big block blockchains in terms of block size. It sought to become “a more technologically advanced continuation of the original Bitcoin protocol — focused on increasing network transaction speeds and enabling drastically increased scalability.”

In simpler terms, BSV sacrifices decentralization for better scalability by using enormous blocks that, at the time of writing, have caused the BSV blockchain to balloon up to about 8TB, or sixteen times the size of Bitcoin core’s blockchain.

When BSV launched in November 2018, its price bounced around between $70 and $180 for the first six months. It then grew in value reaching a peak of $419 in May 2021. It has however crashed back to earth, largely because of Wright’s behavior, in particular his new-found litigious streak.

31: Wright’s Legal Battles Commence

For some unfathomable reason, Wright decided in 2018 that the best way to convince people he was Satoshi Nakamoto would be to sue them into submission.

Craig Wright — source: YouTube.

Unsurprisingly, Wright’s critics didn’t buckle under the weight of his legal offensive. If anything, they doubled down, and Wright’s reputation within the crypto community sank further still.

The era of Wright’s legal battles commenced in earnest after he was served with a lawsuit by Ira Kleiman, Dave Kleiman’s brother, in February 2018. Ira sought to claw back what he believed were his brother’s rightful half of the Bitcoins Wright and David mined together, and to recoup David’s half of the profits from the intellectual property in their partnership — W&K Info Defense Research.

Ira Kleiman — source: the Daily Herald.

Ira’s lawsuit put Wright in a very awkward spot, because he had already admitted that Dave Kleiman had helped him develop Bitcoin and mine it, in writing. So it seemed the only way he could get out of paying Ira for David’s half of the Bitcoin was by claiming there was no Bitcoin, and he therefore wasn’t Satoshi.

However, Wright would never admit such a thing, and he certainly had no intention of paying Ira hundreds of millions of dollars, so he invented a third option for himself.

He claimed that Dave swapped his share of the Bitcoin for a stake in Wright’s company — Hotwire — that went bust two weeks after the ATO denied its tax rebate claim. Wright also offered Ira a share in Hotwire in exchange for his half of W&K’s intellectual property back in 2015, but Ira turned him down. Wright subsequently threatened to release all of the IP as open—source unless Ira complied, which he did not. (These events are described in part one of this series)

Wright had tried to placate Ira with a package of forged documents that appeared to show David agreeing to buy shares in Hotwire in exchange for his share of the Bitcoin Wright says the two men mined together. But Ira spotted that the signatures on all the documents were faked. “Craig backdated these contracts and forged Dave’s signature on them,” he said.

Ira then saw Wright in the news living a lavish lifestyle in London — driving around in a BMW i8 in tailored suits — which he believed Wright had bought using Bitcoin that Dave Kleiman had mined. Ira felt that Dave’s family were entitled to half of the proceeds from Wright and David’s Bitcoin mining business, but Wright wasn’t interested in a settlement. He wanted to fight it out in court.

The lawsuit dragged on for years, finally drawing to a close at the end of 2021. The court ruled that Wright didn’t have a Bitcoin mining partnership with David Kleiman, which proved that Wright’s story of how he came to have such a large stash of Bitcoin was likely invented.

Wright was however found guilty of conversion (also called theft by conversion), which is where you take control of someone else’s property or simply act like someone else’s property belongs to you without their permission, sort of like finding money on the side of the road and taking it for your own. In this case, Wright took control over W&K and its intellectual property, which was half owned by Dave Kleiman. He was fined more than $140 million.

The two judges who oversaw the case – Beth Bloom and Bruce Reinhart – delivered scathing judgments of Wright’s behavior and the evidence he submitted throughout the case. Overall, they found Wright’s account of his and Kleiman’s relationship “defies common sense and real-life experience.”

“The evidence establishes that [Dr Wright] has engaged in a wilful and bad faith pattern of obstructive behavior, including submitting incomplete or deceptive pleadings, filing a false declaration, knowingly producing a fraudulent trust document, and giving perjurious testimony at the evidentiary hearing,” said Judge Reinhart.

Judge Bruce Reinhart. Source: Florida Record.

Likewise, Judge Bloom noted that Wright had been “evasive, refused to give and interpret words in their very basic meanings, was combative, and became defensive when confronted with previous inconsistencies.”

Judge Beth Bloom. Source: Federal Bar Association.

Throughout the three years the lawsuit lasted, Wright launched a number of lawsuits of his own against many different people in crypto, all of whom called him a fraud.

Vitalik Buterin standing up to confront Craig Wright’s claims at the Deconomy Conference.

“It’s an absolutely nonsensical claim,” he said. “It makes no sense because gamma is the percentage of the network which is colluding with the miners, which, by definition, is between 0 and 1.”

Nobody was shocked when Wright’s lawyers sent Buterin a letter asking him to retract his comments and publicly apologize. Buterin ignored the letter. Wright’s lawyers then served a formal claim in the UK’s courts, but they neglected to follow through with it.

Buterin appeared on Lex Friedman’s podcast.

Buterin then baited Wright into suing him again. “Hey, Craig Wright’s legal team,” he said, “do you hear me? Yes, I still think your client is a scammer, so sue me.” Wright chose not to embark on another lawsuit against Buterin.

Roger Ver. Source: Wikipedia.

After suing Ver, Wright went after Pete McCormack, who hosts the popular crypto podcast ‘What Bitcoin Did.’ Like Ver, McCormack called Wright a liar and a fraud. However, Wright’s lawyers claimed that because of McCormack’s comments, Wright was disinvited from a number of conferences, and so this time he sued for damages.

Pete McCormack. Source: the Guardian.

The lawsuit ended with both sides claiming victory, although Wright’s ‘victory’ was undeniably pyrrhic.

Wright was only awarded a mere £1 in damages, despite ‘winning’ the suit, because the court found he had lied about being disinvited from ten or so conferences (he was never invited in the first place). The court also refused to grant an injunction preventing McCormack from calling Wright a liar and a fraud again.

Craig Wright’s most recent legal dispute played out in Norway. A Norwegian Twitter user called Hodlonaut called Wright a ‘fraud,’ ‘scammer,’ and ‘faketoshi,’ a term referring to someone who claims to be Satoshi but really isn’t.

Wright demanded Hodlonaut remove the tweets and state publicly that Wright was Satoshi. Hodlonaut — whose real name is Magnus Granath — refused.

During the Hodlonaut trial, Wright’s story about why he couldn’t cryptographically prove his claims changed yet again.

The Norweigan court found in Hodlonaut’s favor. Judge Helen Engebrigtsen held that Hodlonaut “had sufficient factual grounds to claim that Wright had lied and cheated in his attempt to prove that he is Satoshi Nakamoto.”

32: Wright Continues Sailing Into The Wind

Despite his lawsuits going precisely nowhere and his reputation laying in tatters, Wright fought onward. He displayed a steely determination to convince the world he invented Bitcoin.

Craig Wright’s BlackNet Tweet.

He no doubt hoped sharing this document would win him a few new followers, and perhaps rekindle discussions about whether he did in fact invent Bitcoin. But this hope turned out to be short lived and seriously misguided, largely because the documents Wright shared weren’t as authentic as he made them out to be.

Unbeknownst to Wright, the abstract he shared was identical to the second version of the Bitcoin whitepaper, meaning it included a collection of new vocabulary and grammar changes not present in the first draft of the whitepaper. But Wright said he shared this abstract with the Australian government before Satoshi shared the first and second versions of the whitepaper, which doesn’t make any sense.

What’s more, we know from Satoshi’s emails with Hal Finney that Satoshi wrote the whitepaper after developing Bitcoin for eighteen months, and not — as Wright suggested — eight years earlier, in 2001. If Wright were Satsohi, and he invented Bitcoin in 2001 (or even earlier), why didn’t he share it then? And why would he lie to Hal Finney about when he developed it?

*

Another year went by before we heard more from Craig Wright.

In February 2020, he told the police that hackers masquerading as tradesmen set up a secret wireless router in his home which somehow gave them access to his wallet files and cloud storage. The hackers apparently stole all of Wright’s 111,000 Bitcoin in three transactions.

The hackers also allegedly stole 37GB of white papers and research data from Wright’s cloud storage, which they then wiped so Wright could no longer access it, as well as £1.1 million worth of BSV tokens.

It’s not clear how the hackers could have stolen Wright’s Bitcoin given the level of security that supposedly protected it. “The keys were contained in encrypted wallet.dat files, which were contained within a password-protected RAR file. The wallet.dat files themselves were also protected by an algorithmic masking scheme as a layer of added protection” it was claimed.

He had claimed to control the 1Feex wallet as early as 2013, but it was shown during the Kleiman v Wright suit that the evidence Wright relied on to prove this claim was falsified.

When Wright discovered he had been hacked, he claimed to have wiped his computers and all his hard drives to ‘ensure they didn’t contain any malware,’ without backing up the drives, he told the police. He later said it wasn’t ‘practicable’ to back them up.

Wright did in fact report the break-in to the police (and claimed doing so proved it took place), but as far as we can tell, the police never launched an investigation to try and find the perpetrators.

Surely a theft of that magnitude would warrant at least a follow up?

We can only guess at why Scotland Yard neglected to investigate Wright’s case. It’s possible (but unlikely) that they didn’t pursue the case because there wasn’t much chance of recouping the stolen Bitcoin. It’s also possible (and comparatively far more likely) that the police found no evidence that a crime had occurred, and saw no reason to expend their resources searching for master thieves who probably didn’t exist.

*

At the time, it wasn’t clear why Wright told the police his Bitcoin was stolen.

We now know, however, that Wright reported the theft in order to launch a series of lawsuits against crypto developers to try and win control of the private keys that control the contested wallets.

The trial is set to play out sometime in 2024. Wright will face many daunting problems: (1) he needs to prove he owned the coins in the first place; (2) he must convince the courts that the ‘1Feex’ coins aren’t actually controlled by those who hacked Mt Gox in 2011; (3) he needs to address the various inconsistencies in his story, especially his claim in a Norwegian court that he stomped on the hard drives and destroyed the keys himself.

33: COPA & The Bitcoin Whitepaper

Crypto Open Patent Alliance (COPA) logo.

COPA is a non-profit made up of wealthy and influential individuals like Jack Dorsey and Mark Zuckerberg, as well as companies like Meta, Blockstream, Kraken. Together, the members encourage crypto adoption through a collaborative alliance against patents, which they argue discourages growth and innovation.

COPA filed suit against Wright after he won the rights to the Bitcoin whitepaper copyright in a UK lawsuit. Wright’s suit forced Bitcoin.com — which hosts the paper — to host a version of the whitepaper which names Wright as Satoshi, but only in the UK. Wright won the suit by default — Bitcoin.com didn’t defend itself in court.

COPA’s lawsuit against Wright seeks a statement to the effect that Craig Wright did not write the Bitcoin whitepaper (and therefore is not Satoshi Nakamoto), and an injunction restraining Wright from claiming he is the paper’s author.

The lawsuit, which isn’t scheduled to play out until 2024, will be the toughest test yet for Wright. If he loses, it will mark the final nail in his crypto-coffin, if only because he goes into court with a distinct advantage. COPA, as the plaintiff, needs to prove Wright didn’t invent Bitcoin — in other words, it needs to prove a negative.

This isn’t an impossible task, but it’s still a tall order for COPA to put Wright’s claims to bed forever.

34: End

That’s all folks.

We’ve now covered all the key evidence relevant to the question of whether Craig Wright really is the man behind the digital mask: Satoshi Nakamoto. As we’ve shown, it’s impossible to say for certain whether or not Wright is Satoshi until either Wright gives up some serious, verifiable evidence, or the real Satoshi shows himself.

“In what he said, he often went further than he needed to; further than he ought to have done. He appeared to start with the truth, and then, slowly, he would inflate his part until the whole story suddenly looked weak.”