Cracks in Ira Kleiman’s story widening as Kleiman vs Wright defense makes their case

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The first full day of the defense’s case-in-chief took place on Wednesday, and the focus has been on identifying the cracks in Ira Kleiman’s story if not widening them further.

Most starkly apparent has been the difference in subject and tone from the witnesses taking the stand in the defense’s case.

The defense’s first two witnesses were two highly credentialed experts, senior vice presidents at global consulting firm AlixPartners: Kevin Madura, of the firm’s cybersecurity practice group, and Nicholas Chambers, of the firm’s investigations, disputes and risks practice group. Madura was a cybersecurity expert with IBM and has helped design and develop blockchain based technologies for government agencies. Chambers has provided consulting expertise in the field of forensics in hundreds of civil and criminal matters.

Madura, when being examined by attorney for the defense Zalman Kass, talked about the history of the Bitcoin protocol and the programming behind it. Madura reviewed Dave Kleiman’s background—not just looking at his paper resume but his previous work experience, publications, writings, and the evidence submitted in Kleiman v Wright.

Q: And did his previous work experience indicate that he had any ability to code?

A: No.

He also explained to the jury that of the many alphabetical certifications on the end of Dave Kleiman’s name, none of them related to computer programming.

Chambers testified that Dave Kleiman’s 14 hard drives and USB devices that were available to the sweeping discovery process in the Satoshi Nakamoto civil case all had “active data” added or modified on them after Dave Kleiman’s death. Importantly, he identified TrueCrypt folders on three of them which he says are functionally impossible to crack. In what fragments of information Chambers was able to recover, there was scant reference to Bitcoin, including a Bitcoin address accompanied by the phrase “is this a satoshi address?”

The value of the testimony to the defendant’s case is obvious: not only did Dave Kleiman not have any of the programming skills required to have contributed to Bitcoin, the only realistic repository of information relating to Dave Kleiman’s activities is also inaccessible, largely in part due to the actions of the plaintiff, Ira Kleiman.

But both also seemed a deliberate riposte to the plaintiff’s offered Bitcoin expert from the opening day of trial, Andreas Antonopoulos.

Antonopoulos’ testimony primarily involved him relaying his understanding of Bitcoin history to the jury. He admitted he could not testify about Dave Kleiman’s ability to invent Bitcoin, nor could he even say who the fortune of Bitcoin at issue in the case belong to. He was also only permitted to testify on the basis that he would not opine on the ultimate damages to be awarded in the case.

When cross examining Antonopoulos back on that first day, attorney for the defense Andrés Rivero made a point to get him to admit to the jury that he’d neither served as an expert in federal court before nor had any specific expertise in Bitcoin other than selling Bitcoin related merchandise and speaking with media outlets.

“But, sir, regardless of what you say about your knowledge about Bitcoin, the truth of the matter is you yourself know, you’re not even in the top one thousand people with knowledge about this Bitcoin area,” asked Rivero.

“What you really are is you are more comfortable with mainstream audiences, and you have practiced public speaking.”

“I’m very good at explaining this technology in simple terms. And in terms of this industry, there are a lot of very smart people in this industry, and I wouldn’t claim to be the smartest in this industry,” spluttered Antonopoulos.

Such differences are inevitable given the position each party is in. The plaintiffs have been forced to build their case on supposition and second-hand testimony to fill the gaps. Naturally, it’s going to be easier for Dr. Wright to produce information and witnesses that speak to the events at the heart of the case, because he was there when they happened.

For example, Antonopoulos’ inability to testify as to the valuation of the Bitcoin at stake in the case is at least partly informing Dr. Wright’s latest motion to have an early judgment entered in his favor. There, his complaint is that the plaintiffs have offered no evidence for the jury to assess the value of the supposed Bitcoin and intellectual property at stake in the case.

Judgment on this point is still outstanding.

Expect this change in the nature of witnesses and testimony to persist throughout the defense’s case. In the space of just over one full day of the defense’s case, the jury has heard from the two highly credentialed expert witnesses from AlixPartners; decorated Royal Australian Air Force Wing Commander and Dr. Wright’s uncle Don Lynam, who testified to being given a rough copy of the Bitcoin white paper by Wright before it was released; and Lynn Wright, Wright’s estranged ex-wife who confirmed that as far as she knows (and her sworn testimony is that the ‘W’ in W&K refers to her) the company was solely set up for the Department of Homeland Security tenders Dr. Wright was proposing with Dave Kleiman and nothing to do with Bitcoin.

The next step for the defense is to continue examining Dr. Stewart MacIntyre, who began testifying today and whose testimony Ira Kleiman fought to have excluded before trial.

MacIntyre will testify as to Dave Kleiman’s medical conditions. We know from MacIntyre’s expert report that Dave Kleiman’s health was on a sharp decline in the years preceding his death, and his testimony is likely to be helpful in convincing the jury that Dave Kleiman was in no position to invent Bitcoin at the time Dr. Wright was working on it.

The defense is also likely to reintroduce Dave Kleiman’s other best friends, Patrick Paige and Carter Conrad, both of whom have testified that Dave Kleiman never talked to them about Bitcoin.

In other news, parties told the Judge on Wednesday that they don’t expect to be finished before Thanksgiving. There was some hope that the jury would be able to begin deliberations on November 23, but extended testimony from Dr. Wright and several detours have made this unlikely.

CoinGeek features Kurt Wuckert Jr. in recap coverage which will be livestreamed daily at 6:30 p.m. EST on our YouTube Channel.

Watch our Day 11 Special Report from the Kleiman v Wright trial here:

Check out all of the CoinGeek special reports on the Kleiman v Wright YouTube playlist.