Craig Wright sets record straight on Tulip Trust

Craig Wright sets record straight again on Tulip Trust

Dr. Craig Wright is setting the record straight (again) about one of the Bitcoin world’s favorite topics—the so-called Tulip Trust.

Tulip Trust is the name given to legal and technical trust structures that hold rights to a large number of bitcoins mined by Craig Wright’s companies in 2009 and 2010, the first years of the Bitcoin blockchain. The exact number of coins in the trust has been the subject of inquiry—with Dr. Wright testifying that his companies mined about 800,000 coins; some documents refer to a 1.1 million figure—but that number could also include approximately 320,000 coins mined by Dave Kleiman. The Tulip Trust is a family trust, where Craig Wright’s family members are beneficiaries. Assets in that trust fund are currently at the center of a legal battle between Dr. Wright and the estate of the late Dave Kleiman.

Read more about Tulip Trust here.

First, a quick recap

Ira Kleiman filed a lawsuit in 2018 in the U.S. District Court for the Southern District of Florida, claiming that his late brother Dave and Dr. Wright had a legal partnership related to work they did together on Bitcoin-related matters. The lawsuit claims the estate of Dave Kleiman is now owed half of all assets attributable to that alleged partnership; Kleiman argues that Bitcoin mined by Dr. Wright or his companies belong in that partnership, and therefore seeks half of any Bitcoin held in the Tulip Trust.

Earlier this year, the parties in the case became embroiled in disputes related to the discovery process of the litigation (the phase during which parties ask each other for information and documents). This led to an evidentiary hearing before Magistrate Judge Bruce E. Reinhart on potential discovery sanctions.  

One of the key issues in dispute was Kleiman’s request that Dr. Wright provide a list of public addresses for the Bitcoins he mined before December 31, 2013. At the evidentiary hearing, Dr. Wright testified to explain why he could not provide that list of public addresses at such time, but believed he could do so in the future.

He explained that the public address system widely used in Bitcoin today was not how he designed Bitcoin to work in the beginning, and that is partly why he did not keep in 2009 and 2010 any list of public addresses for the Bitcoin he mined into his companies in those years. Furthermore, he testified that he placed information necessary to determine the public keys [and thus public addresses] for the mined coins, as well as the ability to access private keys for the coins, into an encrypted file that he intentionally did not want to be able to access until at least January 2020. 

Dr. Wright asked Dave Kleiman to help him implement a technical solution that would not allow Dr. Wright or his family to even access that encrypted file until at least January 2020; and even then, that would only allow information needed to generate the list of public keys (and thus public addresses) for Bitcoin mined by Dr. Wright’s companies in 2009 and 2010, and not yet provide (in January 2020) information necessary to access the private keys necessary to spend such coins. 

After that evidentiary hearing on the discovery disputes, Magistrate Judge Reinhart issued a recommended finding that a partnership existed between Dr. Wright and Dave Kleiman, and a recommendation that half of the Bitcoin mined by Dr. Craig Wright or his companies before December 31, 2013, should be awarded to the Kleiman estate, along with half of any intellectual property (IP) owned by Craig Wright prior to December 31, 2013. Those issues and broader issues in the case are still the subject of litigation, and have not yet been fully decided. The full issues in the case will not be decided until other proceedings, and ultimately, trial currently set in mid 2020.

Which brings us here.

Dr. Wright sets record straight

Much has been rumored about what will supposedly happen in the next few days and weeks, including speculation about whether Dr. Wright is actually going to gain access to the infamous Satoshi coins in January 2020. So what can we expect if and when the Tulip Trust door is opened?

According to Dr. Wright, This is a private family matter.

“What a family does with its finances should be its own private business,” he said, clarifying that there is no guarantee that the private keys to those coins would be available in January 2020.

Dr. Wright also says that “many of the questions being asked arise from fundamental misunderstandings of bitcoin” and it is evident he intends to now start clearing up those misconceptions.

His statement clarifies the following about what will (and will not) happen in January 2020:

As I’ve explained in court proceedings, I believe I will receive information in January 2020 that will enable us to identify coins I mined into my companies in 2009 and 2010, but cannot be certain that all of that information will in fact arrive. I have not said the private keys to those coins would become available, or if so, actually used, in January 2020. In the next few weeks, we will be holding trust meetings and working out the next steps going forward in 2020.

Therefore, in January 2020, the world should not expect Dr. Wright or his family to actually access, spend or move any of the Bitcoin in the Tulip Trust or to be signing any transactions with private keys for such coins. But more information about those coins may come to light.

Dr. Wright’s statement indirectly reinforces a message he has been saying all year: access to or the use of private keys to early mined Bitcoin does not itself prove Dr. Wright is the creator of Bitcoin. Dr. Craig Wright has said before that use of private keys just means a person possesses those keys, and he does not intend to prove that he created Bitcoin simply by using private keys to early mined Bitcoin—as many people wrongly want him to do. Instead, he has repeatedly stated over the past year that courts are a better venue to prove he is Satoshi Nakamoto.

Don’t expect a BTC market flooding

Furthermore, whenever his family does ever obtain access to coins in the Tulip Trust, Dr. Wright is correcting another wrong speculation about what they will do with BTC from the trust:  they will not flood the market with rapidly selling all the family’s BTC coins. Instead, he confirmed that the family would work to “ensure that the fallout from any interaction in the market involving my family’s trust coins is minimized.”

“I do not intend to dump my family’s BTC as some people suspect or want, as this would hurt many people in the industry. Instead, I will work with the family trust to implement plans to slowly move the interests of the trust into a sustainable model that builds the Bitcoin SV environment and ensures that the bitcoin that I originally envisioned more than a decade ago (now known as Bitcoin SV – BSV) continues to grow strongly,” Dr. Wright said.

What must be done

The next 12 months are going to be busy not just for Dr. Craig Wright, but for the whole Bitcoin network as well. The Bitcoin SV network will undergo its historical Genesis hard fork protocol upgrade on February 4, 2020—a major step that will see BSV restore the Bitcoin protocol as closely as possible to Satoshi Nakamoto’s original design. Not only will it allow Bitcoin to continue to massively scale on-chain, it will remove many other restrictions previously imposed on Bitcoin’s technical capabilities, making it easier for developers to fully utilize Bitcoin for smart contracts, tokenization, Metanet applications, and a wide range of more complex functionality.

As Dr. Wright puts it:

Beginning in 2020, people will start to better understand the power of bitcoin and just how fragile the position taken by the Bitcoin Core developers—and their creation of a different coin in BTC—really was. Bitcoin was never designed to be anonymous; instead, it is anti-anonymous. Bitcoin was not designed to oppose governments or banks; instead, it is honest in nature and designed to implement a system that fights corruption. Governments are not bad when they are honest and subject to the just will of the people. It is anonymity that allows corruption to flourish. In 2020, people will start to see that truth and the true nature of Bitcoin.

Read Dr. Craig Wright’s statement here.

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