New technologies mean new challenges. And the legal and regulatory systems can’t always keep up. For that reason, any litigation proceedings concerning brand-new technology like cryptocurrency are likely to be unprecedented and have a significant impact on similar cases in the future.
Many have good reasons to believe that the lawsuit by the presumed creator of Bitcoin, Craig Wright, against Coinbase and Kraken is one such case.
📣PRESS RELEASE: Dr Craig Wright, the inventor of the first successful electronic cash system, #Bitcoin has filed #IP claims against Kraken & Coinbase for misrepresenting the digital asset “Bitcoin Core” (#BTC) as Bitcoin.https://t.co/UMxTSDZwpA#BSV #Law #ONTIER #CraigWright
— ONTIER LLP (@ONTIERLLP) May 3, 2022
Basis of the claim
Last month, Wright and two associated companies filed a GBP 500 billion lawsuit against Kraken and Coinbase exchanges in the Intellectual Property List of the Business and Property Courts of England and Wales. The claimants are represented by the law firm Ontier.
The basis of the claim is that the two exchanges have been trading in BTC (“Bitcoin Core”) and attracting investors by passing it off as Bitcoin. Wright and other claimants are claiming that to be a misrepresentation of facts and defrauding investors, saying that BTC is not Bitcoin.
BTC was only created in 2017 as a software implementation different from the Bitcoin protocol created by Wright and set out in his white paper over a decade ago. Wright and others are seeking an injunction to prevent the exchanges from promoting BTC as Bitcoin.
Craig Wright continues his claim of being Satoshi Nakamoto in another lawsuit, this time against Kraken and Coinbase. Will we finally see a proper debunking of his claims in court? So far they've gone unchallenged. https://t.co/JUXHZNvv8e
— Andres Guadamuz (@technollama) May 9, 2022
What are the chances?
Wright won a Bitcoin-related copyright infringement case last year against a website that was using his whitepaper on the cryptocurrency, arguably misrepresenting their product as Bitcoin. He also has several other related cases pending, where he’s also represented by Ontier. So, this isn’t his first time successfully defending his creation.
Strictly speaking, BTC is technically not Bitcoin as it doesn’t adhere to the Bitcoin protocol. It doesn’t look like the original software. So on the facts, Wright’s claim is correct. But what does it mean in practice?
At the moment, it’s too early to tell. However, for Coinbase, which is a huge exchange that falls under regulations as it trades publicly, the lawsuit could potentially mean serious consequences and not just the civil law kind.
First, they must declare this suit to their investors, which could lead to a strong market reaction. Second, if they are found to have lied to their investors, that also means that they would be found to have broken several federal laws too. Third, a creator of Bitcoin is going after a huge company as an individual; that’s not going to go unnoticed by crypto enthusiasts and could cause a ripple effect, especially if the case makes it to court. After all, Wright is an influential thought leader and has a lot to gain by letting this litigation go on rather than settle. As he pointed out, “this is about protecting the consumer from fraud and deception”.
YouTube: Craig Wright Sues Coinbase, Kraken, claiming BTC is NOT Bitcoin