GM, Joanna here! 

Craig Wright has been testifying in a London court that he is Bitcoin founder Satoshi Nakamoto.

The Australian-born computer scientist’s claim that he authored the Bitcoin white paper is at the heart of a high-stakes court battle with the nonprofit Cryptocurrency Open Patent Alliance.

Wright’s eccentricity and the mystique surrounding Satoshi make this one of crypto’s strangest cases. 

But Wright is also involved in another case that may prove stranger still — and even more consequential for Bitcoin. 

This case — Tulip Trading Ltd vs Van der Laan — will be heard in the UK this year.  

It will decide not only Wright’s potential access to a staggering amount of Bitcoin, but the future of the cryptocurrency as we know it. 

What is the Tulip Trading case?

The Tulip saga began in 2020 when Wright said the network of his home office in Surrey, England, had been compromised. 

He said a hacker stole private keys associated with two crypto wallets belonging to Tulip Trading, a Seychelles-registered company Wright owns.

Those wallets contained 110,000 Bitcoin — now worth about $5.5 billion.

In 2021, Wright, via Tulip, made a move to restore the allegedly stolen assets — filing suit against 16 Bitcoin developers.

In the suit, Tulip argued that:

• Bitcoin devs are a kind of “fiduciary” — bound to act in the best interests of users of the blockchain; 

• They were therefore responsible for the lost Bitcoin;

• And they must therefore provide a software patch to restore Tulip’s assets.

The devs argue that they bear no such responsibility, and that a backdoor in the blockchain wouldn't work anyway. 

A High Court judge decided that Tulip’s claim was not serious, and threw it out. 

Then an appeals court overturned that ruling early in 2023, and the case can now go to trial. 

But Tulip’s argument must withstand one test in order for the case to be tried. According to a court document, Tulip must prove that it owns the two wallets in question. 

If Tulip succeeds and the case goes to trial, that will test its central contention — that Bitcoin developers owe a fiduciary duty to the users of their software.

If Tulip won, that would be very, very bad for Bitcoin, advocates like the Bitcoin Legal Defence Fund say. 

Crypto developers have never had to shoulder that kind of liability. Given the open-source and decentralised nature of their work, they don’t even know who or where their users are.

The fund says that will deter developers from building Bitcoin projects — and open-source software in general. 

A ‘dangerous’ chance of success

And in the Tulip case, Wright may have some points in his favour.

For one, the appeals court ruling implies that this is a case the judges believe has a reasonable chance of success. 

“That's dangerous,” George Morris, a partner at Simmons & SImmons in London, told me.

“If someone built a backdoor in the blockchain, you wouldn’t be able to trust the software, you’d have to trust the person. That doesn't work in the world of crypto,” said Morris.

Meanwhile, the COPA case continues this week with expert testimony. 

Email me [email protected], or Telegram @joannallama.

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