It’s always great to hear Joshua Henslee’s thoughts on current events in the Bitcoin ecosystem. This week, he shared his views on Dr. Craig Wright suing Coinbase (NASDAQ: COIN) and Kraken and his claim that BTC is not Bitcoin.
What is this lawsuit about?
On May 3, 2022, London-based law firm ONTIER LLP filed a claim against Coinbase and Kraken on behalf of Dr. Wright, Wright International Investments Limited (WII) and Wright International Investments UK limited (WIIUK).
While the full details of the suit are yet to become public, the claim form shows that Dr. Wright accuses the exchanges of “passing off” projects which do not conform to the Bitcoin system he outlined in his original white paper. He wants an injunction restraining the named exchanges from passing off BTC as Bitcoin and damages to the tune of hundreds of billions of pounds.
What does Joshua Henslee think about the lawsuit?
Henslee begins by expressing frustration with the outcome of previous lawsuits involving Dr. Wright. He wishes the results were clearer and didn’t involve both sides attempting to claim victory. However, he finds this case more interesting.
“First of all it’s a bold claim,” Henslee says, noting how Dr. Wright isn’t making any bones about this: the gloves are off, and he is saying BTC is not Bitcoin outright.
He then gets to the heart of the matter. Whether you agree with protocol changes like SegWit or not, and whether you support the idea of small blocks or big blocks, there’s simply no denying that BTC Core developers have changed the protocol so much that it no longer resembles the Bitcoin system Satoshi Nakamoto released 13 years ago.
“If you look at this case from a purely logical standpoint…this case is open and shut; Craig is correct. He should win,” Henslee said.
Being such a bold claim, Henslee believes that it will get plenty of mainstream coverage. This should render the anonymous accounts on Reddit and social media platforms irrelevant as serious journalists and outlets begin reporting on the case.
Coinbase has no choice but to disclose this to its investors
Henslee points out that a regulated public company like Coinbase can’t simply dismiss or ignore this claim the way a rogue firm like Binance could. They’ll have to both acknowledge the suit and answer it one way or another, and they’ll have to inform their investors about the potential risks.
“They’ve been trying to hide Craig for years, to claim that he’s just a fake person and a scammer, but for him to step up and do this in a court of law… it’s a costly signal,” Henslee notes. He rightly points out that Dr. Wright doesn’t have a lot to lose in this, whereas the exchanges in question have everything to lose.
What could the second-order effects be for the digital currency markets? Henslee believes that if the case makes significant headway, it could spread fear throughout the markets, which could negatively impact coin prices. In his statement regarding the lawsuit, Dr. Wright also stated that these exchanges need to list BSV and acknowledge it as Bitcoin, which could have some interesting consequences, too.
Could the case end in a settlement?
It’s common for cases like this to end in a settlement, but Henslee sees no reason for Dr. Wright to settle. “He wants to crush them,” he says. “If he gets into the courtroom, he is going to be able to show that his assertion is true.” He also points out that whereas previous cases have relied on various parties’ interpretations of events and the law, this one is cut and dry as the code is all publicly visible on GitHub.
Not only is the entire history of the code publicly available, but Dr. Wright has what Henslee calls a “kill shot” he can use in court. If he demonstrates that a signed transaction from 2009-2012 doesn’t work on BTC or BCH, but that it does work on BSV, then it’s self-evident that BSV is Bitcoin.
Henslee doubts that things will happen as simply as this, given what’s at stake, but he believes that the secondary chatter this case will create and the investigations by journalists that result from it may be more significant than the case itself. Come what may, interesting times are ahead!
Watch: CoinGeek New York panel, Media Influence: How News Reporting Affects the Digital Asset Market
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