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The Faketoshi BTC 550K Saga

The Faketoshi BTC 550K Saga

Craig Wright. Source: a video screenshot, Youtube, Crypto Finder

With the ruling coming in on August 26th in the case of Craig Wright, a controversial Australian computer scientist and supporter of Bitcoin SV (BSV), also known as ‘Faketoshi’, one may think that this episode in the Cryptosphere is over – but it’s far from it. If anything, this may be just a beginning of various unanswered questions and issues demanding a resolution. As a myriad of questions remain unanswered, so let’s go through the major issues.

What happened?

As reported, during the hearing held in Florida, the judge reportedly rejected Wright’s testimony, finding that Wright had committed perjury and falsified documents, and Wright may lose a whopping 50% of the BTC tokens he mined with his now-deceased business partner, David Kleiman (reportedly around BTC 1.1 million (USD 11.2 billion) in total). This is only a part of a much larger and ongoing case to decide the custody of the accumulated Wright-Kleiman fortune, with Ira Kleiman, brother of David Kleiman, suing Wright for the BTC holdings Wright allegedly stole after his partner’s death.

However, attorney Bill Smith tweeted that “whatever happened at the csw [Craig Wright] hearing today – it doesn’t really matter until the actual federal judge reduces it to an Order,” given that it appears that a magistrate judge held the hearing, whose “main role is to try and help settle cases” and “assist the federal judge and clear his/her docket.” The federal judges “see the worst of humanity and thus aren’t easily fooled by someone like csw,” Smith says.

It will also be interesting to see how this particular judgement will affect other ongoing proceedings involving Wright, though it may be possible that this will have a lesser impact than the Order by a federal judge.

Does Wright have those coins?

Many people believe that Wright does not actually own any BTC and that he didn’t prove that he has access to any coins. Some people find that, according to the interview Wright gave, he might transfer the BTC from the “Tulip Trust” allegedly holding BTC that Wright and Kleiman mined between 2009 and 2011.

On the question if he has the money to pay Kleiman, Wright replied: “If the court makes an order, I will comply with the order. And the court has made an order. It’s that simple,” adding “I own a lot of BTC. Dave should have owned 320,000 and I should have had 800,000 and now it’s 50/50. At the end of the day, that’s not a good thing for BTC.”

Watch the latest reports by Block TV.

The interviewer asked Wright if this affects the so-called “Satoshi Blocks” of unmoved bitcoins in the blockchain, and if this means that the blocks that haven’t moved since 2009 will now get transferred, to which Wright replied “Not at least, just under half. Because they’ll have to come out of partnership. I spent more money on the project than Dave, so I will rule on that and effectively Ira will get maybe 480,000 BTC.” He added that this does not include BTC, BCH, and BSV and other BTC forks, because, “according to the judge it’s only from before Dave died, so only BTC. Sorry BTC.”

What if Kleiman does receive the coins?

While we don’t know yet what Kleiman would do with BTC 500,000 he theoretically might get, what is more sure is that he will need to pay taxes. While some speculate it might be USD 2 billion, others claim that more realistically it would be around USD 3 million – USD 20 million.

Meanwhile, attorney Smith speculates that Kleiman may be able recover his attorney fees and it may be possible for Kleiman to get the federal judge to reduce his judgment to a USD monetary amount. “Kleiman surely knows he is not getting any Bitcoin,” says Smith, “but he maybe able to get a judgment for the USD value + his attorney fees,” and if that happens, “he will have a judgment for ALOT of money hung around faketoshis neck forever. Whatever he has, whatever he earns…it’s kleimans…and the lack of actual Bitcoin is irrelevant.” Smith concludes with: “Get your popcorn ready. Fraud doesn’t pay folks.”

What did the judge say exactly about Wright being Satoshi?

The transcript from the hearing is not out yet, though many people wish to see what exactly was said and in what regards was Wright treated. The Twitter user who claims to have attended the latest court hearing said that the presiding judge, Bruce Reinhart, was “brutal in his remarks” against Wright “while commending his attorneys for dealing with him.”

Wright did say in the interview with Modern Consensus though that “The judge won’t rule on whether I’m Satoshi. But the partnership is. So when Dave Kleiman passed, the partnership transferred to Ira.”

While the Cryptoverse rejects this idea, and the judge in his hearing may be inclined to agree (this remains to be clarified), others are still discussing alternative theories, jokingly and otherwise. Wright said that he’s not going to complain for getting to keep billions in USD, adding “And I’m the only surviving member of Satoshi? The judge ruled it was a partnership. I’m the asshole Satoshi. And Dave was the nice one.” Discussions continue.

Devin Freedman, the lawyer representing the Kleiman estate, was not available for immediate comment.

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