Kleiman v Wright: Judge denies Ira Kleiman request to declare case over

The Southern District Court of Florida has denied Ira Kleiman’s request to sanction Dr. Craig Wright over his conduct in the Kleiman v Wright case. Had it been approved, the court could have declared the lawsuit over by issuing a default judgment in Kleiman’s favor.

It’s the latest in a string of procedural battles between Kleiman and Wright over details and events during the discovery period. The latest order denying Kleiman’s request means the actual trial period will likely start as scheduled on August 31, 2020 (it had already been delayed from the original start time in early July).

United States District Judge Beth Bloom signed the order which noted in its conclusion:

Upon review of the record and careful consideration of the parties’ briefings, the Court does not find that Plaintiffs have carried their burden to remove this case from the jury by striking Defendant’s pleading and entering a default judgment as a sanction.

The order notes that Kleiman and his legal team “depict unsettling issues” regarding some of the testimony and evidence presented in the case so far, and “certainly appreciates Plaintiffs’ frustrations.”

“However, these frustrations and doubts aside, significant factual disputes abound regarding the evidence presented, the role and importance of various pieces of evidence in the case, Defendant’s intentions, and the credibility of witnesses.” Bloom added that all this meant it should be left to a jury to weigh the evidence and make a final decision.

Kleiman’s allegations that Wright had committed perjury and fabricated evidence were “extreme” and “severe,” the order noted. Bloom also wrote that Dr. Wright had also pointed to several “deficiencies” in the Plaintiff’s characterization of events and claims. As such, approving the sanction was not appropriate for a judge to decide at this point.

“Plaintiffs have aired longstanding grievances about Defendant’s conduct throughout this case, but they have not shown clear and convincing evidence of an ‘unconscionable plan’ designed to defraud the Court, most especially since the Objections Order was entered.”

Judge Bloom could also have approved Kleiman’s “lesser sanctions” request that his grievances be officially established as fact in the trial. The most notable one of these was Dr. Wright’s alleged failure to produce an accurate list of his Bitcoin holdings at the relevant time. However, Bloom said Wright had since done so and also denied that request.

While the lesser sanctions request would not have ended the case immediately, it would have carried considerable weight in arguments for the impending trial. Instead, Kleiman and Wright will enter the next stage on a far more even keel than the Plaintiffs would have liked.

Dr. Wright and his team countered Ira’s request on June 1, claiming Plaintiffs’ request was an attempt to silence him by denying him the right to testify before a jury, and further damage his credibility as the creator of Bitcoin. Regardless of the final outcome of the case, these attacks (if established as legal facts) would have further-reaching effects in the digital asset world and could be used to damage the wider Bitcoin BSV industry as it seeks to prove to the public that it alone represents the original and true Bitcoin.

Judge Bloom also noted Dr. Wright’s admission that he has been diagnosed as being on the autism spectrum, which the court considers relevant when assessing his responses and recollection of some events.

What the case is about, and what it’s really about

At issue in this case is the ownership of early-mined Bitcoin, plus intellectual property and research owned by Dr. Wright.

Dr. Wright maintains he is now the sole owner of said properties. Dave Kleiman’s brother Ira (representing the Kleiman family) claim any assets should be shared 50/50 between Wright and Dave Kleiman’s estate. Dave passed away in April 2013.

At this stage it is still not publicly known what the total value of these assets even is, since the list of Wright’s Bitcoin holdings prior to Kleiman’s death remains sealed. Whether Dr. Wright even has the ability or means to transfer control/ownership is also in dispute, though he has stated he will comply with the court’s final decision.

Interestingly, the main focus of this case is itself a sideshow in the bigger picture of Bitcoin. The value and credibility of BTC vs. Bitcoin (BSV) in the public’s and investors’ eyes, longer-term, are arguably more substantial than who gets some of the early money (regardless of its personal impact on Dr. Wright).

Dr. Wright has accused some of BTC’s corporate supporters, namely Tether and Kraken, of secretly bankrolling Kleiman’s side of the case. Both companies have issued denials that this is true.

Plaintiffs have made several allegations attacking Dr. Wright’s credibility and claims to be Satoshi Nakamoto, original and sole inventor of Bitcoin, throughout the pre-trial proceedings. These have been reported and published far and wide in the business and technology press, despite there being no final word on their truth. Dr. Wright has also made several counter-claims about the Plaintiffs’ own conduct and motives.

The final judgment is still now months away from being heard, but it seems at least for now that Dr. Wright will have his chance to make his claims in front of a jury. The expectation is that any trial will include more in-depth detail about the nature of Wright and Dave Kleiman’s friendship and previous work together. We are now waiting to get word that the judge has ruled on Dr. Wright’s Motion for Summary Judgement.

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