Some Points to Mull Over While Waiting for the Verdict on the Satoshi Nakamoto Trial

The Kleiman v Wright civil trial is coming to a conclusion, with the plaintiff and the defense presenting their closing arguments on Tuesday before the Thanksgiving holiday. As the jury continues to deliberate on the verdict, here are some thoughts and questions from someone who has followed the Satoshi Nakamoto trial since the beginning. 

David Kleiman’s Role in Bitcoin

Crucial to the plaintiff’s allegation is the role David Kleiman played in the writing of the Bitcoin white paper and the creation of Bitcoin. While hundreds of email exchanges between Wright and David Kleiman have been presented at court, none of these have directly illustrated the two working together to create Bitcoin.

Plaintiffs have shown detailed email exchange of David Kleiman and Wright co-writing a white paper, titled “Overwriting Hard Drive Data: The Great Wiping Controversy,” from conceptualization to publication in September 2008; however,  there is no mention of the Bitcoin white paper, which was published on October 31, 2008, in their emails, aside from one email of Wright asking David Kleiman to edit it. 

While the defense, through expert testimony, has established that David Kleiman could not code using the C++ programming language that Bitcoin was written in, the plaintiff has redirected that it is possible that David Kleiman could have self-taught himself. Although there is no hard evidence of this. 

Wright had been very forthcoming about David Kleiman being his best friend, and it was also for this reason that he claimed he exaggerated David Kleiman’s role in the creation of Bitcoin because he did not want his best friend to be forgotten, and being a part of Bitcoin is certainly worth remembering.

“What is true is I exaggerated because Dave had no one remember him, and he was the most important person in my life for many years,” Wright said under oath.

Furthermore, Wright admitted that without David Kleiman, he would not have continued to create Bitcoin. It was David Kleiman who provided crucial moral support that led to Wright’s decision to build Bitcoin even though it could end his marriage to his then-wife Lynn Wright, who was against Wright embarking on one of his technological inventions. 

“I failed my marriage because I wanted to invent this thing, and Dave understood. So yes, he was critical to me. I don’t know how else to put it… I should have talked to [my wife]. And I talked to Dave. And I put him before my wife, and I let him talk me into it. So yes, he was important. And for that, I told his father how important he was to me. And he was. Always. I loved him,” Wright emotionally said during his testimony.

Although the jury only has Wright’s words to base their decision on, David Kleiman not having done anything at all to claim credit for being in partnership with Wright in being Satoshi Nakamoto supports this. 

The Mining of the 1.1 Million Satoshi Coins

There is no evidence presented by the plaintiff that directly relates to David Kleiman and Wright mining the Satoshi coins together. There is no written business agreement of a partnership nor a verbal or casual conversation that will prove this alleged business partnership.

David Kleiman was actually a shareholder in W&K Info Defense Research, LLC, the entity the plaintiff was claiming to have mined the said Satoshi coins. However, there is no evidence, again, that W&K Info Defense Research, LLC bought the equipment needed to mine Bitcoin nor any kind of electricity expense that would be a considerable amount when mining Bitcoin. 

According to Wright’s testimony, which is backed up by evidence, W&K Info Defense Research, LLC, was set up in the United States in 2011 and never mined Bitcoin. Instead, it was established with David Kleiman to take advantage of his status as a veteran with disability in gaining attention for proposals they would submit to the Department of Homeland Security. However, no proposal they submitted were approved.

Wright admitted that he and David Kleiman, along with others, mined Bitcoin. But they mined Bitcoin on testnet to test Bitcoin’s unbounded protocol or its ability to scale. However, because they were mining on testnet, they were not actually mining Bitcoin that has real monetary value.

“It was running a testnet version of that. I have a published paper on it. We tested Bitcoin running in my company up to 340 gigabytes, which was around one million transactions a second. And the rate would enable that to be run at over a ten thousandth of a cent per transaction enabling global commerce for people in the third world for a lot cheaper than it is now,” Wright explained.

The Transfer of 573,500 Bitcoins from David Kleiman to Wright

While the plaintiff has been plagued by a glaring lack of evidence, one of the most crucial pieces of evidence presented that could tip the jury in their favor was a transaction that demonstrated a transfer of 573,500 Bitcoin from David Kleiman to Wright did occur. 

According to Wright’s testimony, the 573,500 coins were originally owned by himself, and that he had asked David Kleiman to safeguard it while he was being investigated by the Australian Taxation Office (ATO), which held a grudge against him as evidenced by the more than 200 investigations launched against him. 

“I was getting 17 audits a quarter. They shut down my companies and didn’t stop until I had to leave Australia… Dave helped me act as a front, a sham as the ATO called it. So, it looked like he ran all my companies… the Australian Taxation office almost bankrupt me and became the owner of Bitcoin’s IP,” Wright said during his witness testimony for the plaintiff.

Wright further testifies that he won all of these cases against the ATO and that one of the more compelling pieces of evidence presented by the plaintiff—an ATO document stating that Wright admitted on record that David Kleiman was his partner in creating Bitcoin—should have been inadmissible in court as the ATO has agreed for that document and others to have been fraudulently manipulated. 

In fact, the ATO official in charge of the said documents, Andrew Miller, has been fired because of it, and Dave McMaster, another ATO employee who worked with Miller, had either been fired or transferred to Papua New Guinea. 

What is more glaring though, is the fact that David Kleiman did not contest this transfer of assets from himself to Wright while he was still alive. David Kleiman, a former police officer knowledgeable in such crimes and procedures after such a crime is committed, made no claim whatsoever that Wright has scammed him of the 573,500 Bitcoins. This supports Wright’s claims that he had a friendly agreement for David Kleiman to temporarily secure Wright’s assets from the ATO.

Ira Kleiman’s Testimony

Ira Kleiman, David Kleiman’s estranged brother—Ira had not seen his seriously ill brother in the last two years of David’s life despite living close to each other—has testified that David Kleiman told him after a family Thanksgiving dinner in 2009 that he was “creating his own money” and that it would be “bigger than Facebook.” 

David Kleiman allegedly even drew the logo of a “B” like a dollar sign. However, Ira Kleiman was shocked when the defense informed him that the logo of Bitcoin during that time was actually a gold coin with a huge “BC” at the center. The “B” logo with two lines going through it was actually proposed by a Bitcoin community user in 2010 and was not designed at all by Satoshi Nakamoto.

Ira Kleiman also testified that David Kleiman had a conversation with two of his friends, Patrick Paige and Kimon Andreou, about Bitcoin. However, both Paige and Andreou have testified that David Kleiman had not mentioned Bitcoin to them. In fact, all of David Kleiman’s friends who took the stand have stated that David Kleiman never talked about Bitcoin to them. 

What is more suspicious is that Ira Kleiman had admitted under oath that he had given away David Kleiman’s cell phone, reformatted his brother’s laptop so Ira Kleiman’s wife could use it and deleted or overwritten about a dozen hard drives that came into Ira Kleiman’s possession after the death of David Kleiman.

Knowing that David Kleiman was supposedly “creating his own digital money” in 2009, it is suspicious how Ira had not explored the hard drives for evidence of his Thanksgiving tale.

Wright as a Serial Forger

Because the plaintiff is operating largely on a lack of definitive evidence because Ira Kleiman had rendered any data on David Kleiman’s laptop and hard drives unretrievable, they have chosen to attack Wright’s credibility and alleged that he had forged at least 40 emails. 

What was interesting was that of the 40 emails submitted to the plaintiff’s expert witness to be examined, 100% has been found to have been forged, and it has been alleged that only Wright could have forged these emails.

What has surprised and visibly caught the plaintiff off guard, was when Wright pointed out during his testimony for the defense that he could not have forged or sent those emails. In fact, one particular email sent from craig@rcjbr.org in 2008 to David Kleiman’s email did not exist at the time.

The rcjbr.org domain was actually a family account that represents the initials of Wright’s second wife and his three children. The problem was that in 2008, Wright had just divorced Lynn Wright, and it was not until 2010 that he met his second wife, Ramona Watts. Furthermore, it was in 2011 that the two had a romantic relationship. And of course, his three children were not yet born in 2008.

This now points to Ira Kleiman as the more plausible forger, given his motive and access to David Kleiman’s emails. 

Author’s Thoughts

Given the rundown of some of the major evidence and testimonies in the trial, the author of this article believes that it is still the inaction of David Kleiman while he was still alive that is the heaviest burden to disprove.

David Kleiman, who had his two best friends and business partners sign a lengthy operating agreement when they were establishing their computer forensics firm, did not have the same legal document with Wright in allegedly creating and mining Bitcoin.

On top of suffering from numerous serious illnesses that had him confined at the hospital for more than two years and five months, David Kleiman at the time of his death was in so much debt that he had already gotten a second mortgage on his house. 

During the month before David Kleiman’s death, the 1.1 million Satoshi coins were already worth almost $300 million. If David Kleiman was the co-creator of Bitcoin and mined the coins in question together with Wright, why did he not demand Wright for any of it?

Given that as the plaintiff claims that David Kleiman and Wright undertook the creation and mining of Bitcoin in utmost secrecy, did David Kleiman, being in a ton of debt and being a paraplegic suffering from a painful MRSA infection, put this secrecy above his financial situation and medical condition? 

Is it logical to believe that David Kleiman when he was still alive just let Wright scam him of half of $300 million because he was bound by secrecy? David Kleiman was a computer forensics expert, a former police officer and an army veteran who received the United States Army Soldier of the Year award. 

Did he not have any inkling at all that 573,500 Bitcoin was missing from his account because Wright allegedly stole them? Would David Kleiman not have thought to access this account to sell some Bitcoin to pay off his debts and improve his quality of life? Because if David Kleiman did, then he would have known that his coins were missing and then he would have taken some action. 

Was this kind of accomplished and intelligent person cheated of a fortune without having done anything to retrieve that fortune or hold the person responsible accountable? And there has been no evidence at all of animosity between Wright and David Kleiman. In fact, witness testimonies of David Kleiman’s friends all state that David was excited to work with Wright and held him in high regard. Was this the behavior of someone who was duped?

Would not all of these questions be answered by the simple statement that David Kleiman, being the honest, kind and all-around great guy that he was testified to have been, did nothing while he was still alive because he did not co-write the Bitcoin white paper with Wright under the pseudonym Satoshi Nakamoto and the two never did mine the Satoshi coins together?