In Satoshi Trial (COPA v Wright), COPA board member questioned on Meta’s withdrawal

Getting your Trinity Audio player ready...

As the much talked about trial of the COPA v Wright, also known as the ‘Satoshi Trial,’ enters its third grueling week of testimony and cross-examinations, the mysterious disappearance of tech giant Meta (NASDAQ: META) from the Crypto Open Patent Alliance (COPA) core membership has been questioned in court.

The COPA, a cohort of big tech interests, is suing British-Australian computer scientist and entrepreneur Dr. Craig Wright over his claim to be the pseudonymous creator of Bitcoin, Satoshi Nakamoto.

Much is on the line, including the potential intellectual property (IP) and copyrights that could be claimed by the Satoshi name.

One person who refutes Dr. Wright’s claim to this title is Steven Lee, team ‘lead’ for the Spiral project and board member of COPA.

Spiral is a “not for profit” team that sits within Block, Inc. (NASDAQ: SQ), formerly Square, from whom it gets an annual budget. Block, Inc. is a financial technology and mobile payments business co-founded by Twitter co-founder Jack Dorsey in 2009.

Both Block and Spiral aim to promote open-source development in the BTC space.

“We build and fund free, open-source projects aimed at making bitcoin the planet’s preferred currency,” states the Spiral website.

Spiral’s ‘lead’ Lee, describes himself as “an experienced Silicon Valley product leader working on innovating the role of Bitcoin PM as part of the Spiral effort at Block,” and he took the stand on Monday to answer questions from Dr. Wright’s barrister Lord Grabiner KC.

Under questioning, Lee suggested that despite Spiral’s budget being set by Block, the team has “independence” to decide how the over $10 million in annual funds are used. When pressed by Grabiner over this supposed independence and the benefit to Block of this relationship, Lee said Block has a belief in the importance of the Bitcoin network and ecosystem and sees Spiral as a way to accelerate the development and adoption of bitcoin, increasing the probability of Bitcoin succeeding, thus creating business opportunities for Block in the future.

This question of Spiral’s ‘independence’ is important because Lee also claims to be one of three “independent” board members of COPA who don’t represent the companies they work for but rather the interests of the overall ecosystem.

Grabiner pointed out the repeated use of “independent” and “independence” in Lee’s witness statement. The implication seemed to be one of the lady doth protest too much, methinks? And that, in fact, Lee is about as independent in COPA as Spiral is in Block—i.e., funded by Dorsey’s Block and sharing the same general goals. So, not very much.

As it happens, Block and its founder, Jack Dorsey, spearheaded the birth of COPA, and Block is now listed as a ‘Platinum member’ of the organization whose sole purpose appears to be to sue Dr. Wright.

Another prominent member of the COPA platinum club, up until very recently, was Meta. Another main subject for Grabiner’s cross-examination of Lee.

Meta’s mysterious pre-trial disappearance from COPA

A couple of weeks before the Satoshi trial kicked off, tech giant and former platinum COPA member Meta suddenly and without so much as a goodbye, dropped out of the alliance.

The move was not announced by either COPA or Meta, with the latter yet to make a peep on the subject. An archived version of COPA’s members page shows the Meta name/logo present as recently as January 16, 2024, but seemingly overnight, on January 31, the company behind Facebook disappeared from the COPA website.

This was bad timing from a PR perspective, right as the organization’s big trial was about to kick off, but more than this, Meta’s sudden departure raised several questions.

COPA’s FAQ page states: “Each COPA member will be required to be a member for 3 years before becoming eligible to voluntarily withdraw. A member can withdraw voluntarily by submitting a written notice to COPA. After a member withdraws, they will no longer have access or the ability to use patents from the Shared Patent Library. Any foundational crypto patents the withdrawing member had prior to and during their membership in COPA will continue to be subject to the Patent Pledge even after they leave COPA, but any patents they file for after their withdrawal will not be subject to the Patent Pledge.“

COPA membership terms and conditions, article 3.7 on Voluntary Withdrawal, also states:

“The withdrawal will take effect with respect to the Member… sixty (60) days after the date it submits such written notice to COPA. COPA will publish the existence and effective date of the Member’s withdrawal on its website.”

Firstly, Meta officially joined COPA in January 2022, so the company should not have been eligible for voluntary withdrawal for another year; and secondly, even if COPA had made an exception and allowed Meta to withdraw, in breach of its terms and conditions, it then committed another breach by not publishing the date of the company’s withdrawal on its site—something COPA has still yet to do.

In the immortal words of Captain Blackadder, “I smell something fishy, and I’m not talking about the contents of Baldrick’s apple crumble.”

Now the COPA trial is very much underway; it turns out Dr. Wright’s Barrister, Lord Grabiner KC, also smelled something suspicious.

Grabiner questions Meta’s unexplained dropout

The third week of the COPA v Wright trial saw the beginning of the cross-examination of COPA’s witnesses by Wright’s team, and when the supposedly independent board member of COPA, Steven Lee, took the stand, Grabiner pressed him on Meta’s withdrawal.

After establishing the dubious ground on which Lee bases his claims to “independence,” Grabiner showed him a January 2022 COPA blog post welcoming Meta to its membership, praising it as “the biggest cryptocurrency patent commitment to date.”

Grabiner then pointed out that each COPA member should be required to stay for three years before becoming eligible for voluntary withdrawal.

When Lee confirmed this fact, Grabiner asked, why then was Meta allowed to withdraw early? And did the company give notice?

Lee could not answer, just saying he didn’t know why Meta dropped out, wasn’t sure why it was allowed, and wasn’t part of the communication of them withdrawing.

To this answer, or lack of answer, Grabiner responded with the obvious question: “You’re telling us that even though you’re a board member you simply don’t’ know why Meta withdrew?” To which Lee again responded, “no,” he wasn’t part of the communications—seemingly at least one of COPA’s “independent” board members, who represent the ecosystem at large, has very little control over, or even insight into, the inner workings of the alliance.

When pushed further on the point, Lee elaborated slightly, stating that Meta’s withdrawal was reported to the board, but there was no conversation about the rationale.

“It must have been distressing to hear this happened,” suggested Grabiner—one suspects with a hint of irony—to which Lee said that he wasn’t surprised by the move because when Meta joined COPA, it had a prominent digital asset project called “Libra,” which has since been wound down. The implication being that Meta had a stake in the digital asset space when it joined COPA but no longer has any reason to maintain its membership.

Unfortunately for Lee, this is patently false.

Libra, which was renamed Diem in December 2020 due to legal challenges regarding its name and logo, was shut down in January 2022, and the project was sold to Silvergate Bank. If that date looks familiar, it’s because it’s the same month and year Meta joined COPA.

So clearly, the scrapping of the Libra project had nothing to do with Meta falling out of love with COPA.

Check out all of the CoinGeek’s special reports on the Satoshi Trial (COPA v Wright).