Who created Bitcoin? (& why does this matter?)
Is Dr Craig Wright "Satoshi Nakamoto", the creator of Bitcoin? The identity of the elusive Satoshi has long been an unanswered question in the crypto and blockchain communities. We may now have a pathway to finding out the true identity (or at least whether or not Dr Wright is Satoshi).
In late July 2023, Mr Justice Mellor handed down a judgment setting out how the litigation over this so-called identity issue would be managed. The identity issue is key to four High Court actions between Wright and around 30 other parties. It will be heard (probably by Mellor J) in January 2024.
In this latest judgment following two case management conferences, the judge said the identity issue “should be decided once and once only”. As to how that issue should be tried in the four parallel cases, the judge favoured a “hybrid” approach:
“For those parties who want a stay, and are prepared to give an undertaking to be bound for all purposes by the outcome of the [Crypto Open Patent Alliance] trial, that should be their way forward … By contrast, for those parties who are unable yet to decide what role they should play in the proceedings, I think it is right to order a preliminary issue as regards them. They will participate at their own risk as to costs, if they choose to engage in the COPA trial beyond what are already doing.”
The judge added that he favoured identifying the identity issue “at a broad level” so that the court can keep control over it. He approved the first paragraph of the draft Order agreed by the parties, which states: “There shall be a trial of a preliminary issue in the BTC Core Claim, that issue being whether Dr Wright is the pseudonymous ‘Satoshi Nakamoto’, i.e. the person who created Bitcoin in 2009.”
Finally, the judge gave directions for the January 2024 trial, covering issues including the timing of witness statements, technical primers, expert evidence, trial bundles and skeleton arguments as well as costs and representation.
Other Bitcoin rulings
Mellor J also gave a separate judgment in July 2024 regarding case management in two of the pending cases that involve passing off claims based on Bitcoin. Notably, he said that, even on the most favourable view of the claimants’ evidence, he was not persuaded that they had “substantial liquid assets which would be readily available to meet the substantial costs liabilities which might arise in these two actions”.
There was therefore a need for the claimants to provide security of £400,000 in total (digital assets were not acceptable). The High Court required this payment to be made within 28 days or the passing off actions will be struck out.
As previously reported, the Court of Appeal reversed Mellor J’s finding regarding copyright in the Bitcoin File Format case, and that is also now expected to proceed to trial.
Finally, the Court of Appeal has upheld a decision to reduce damages due to Dr Wright in a defamation case due to his fraudulent exaggeration of the claim.
What does this mean?
The litigation over Bitcoin is complex and involves many parties. It is likely to be one of the most watched cases of 2024 given the high profile of the participants and its high value.
Mellor J’s judgments demonstrate the proactive approach the UK courts take to case management in such complex disputes, where the are multiple issues and parties that may or may not be represented.
We will report on further developments including the all-important identity issue in due course.