The years-long legal case involving Bitcoin SV proponent Craig Wright and the estate of his former partner David Kleiman will be going forward, after the Wright admitted to not having enough money to finance a previous settlement.
According to court documents filed on November 1, the plaintiffs were informed that Wright would be unable to bankroll the settlement, a move which would have cost him 500,000 BTC (worth about $4.5 billion at press time).
More to Come from This Tale
The case had been moving towards a resolution with the previous settlement, after Magistrate Judge Bruce E. Reinhart of the Southern District of Florida ruled in August 2019 that Wright should forfeit the Bitcoins to the Kleiman estate.
On September 17, Wright’s attorneys filed a 30-day extension for case deadlines and discovery, citing the need to facilitate discussions with the plaintiffs as the parties had been engaged in “extensive settlement negotiations.”
Per the document, both parties had entered into a non-binding agreement to settle the matter, and talks were advanced towards finalizing the terms of the deal. However, as the new court documents notes, Wright suddenly reneged, claiming that he can’t finance the settlement.
The document itself is an expedited motion by the plaintiff to depose an out of state witness. The deposition revealed that Wright and the Kleiman estate had discussed a settlement in September, adding that his claims had implied that he would be able to meet all financial commitments. Now that he has broken the settlement agreement, however, the plaintiffs are not preparing for a full trial.
Depositions Are Already Taking Shape
As part of their preparations, the plaintiffs have contacted James Wilson, the Chief Financial Officer of Wright’s companies between 2012 and 2013, “during which Dave was alive, and Craig alleges he sold Dave interest in his companies in exchange for a fortune of Bitcoin.”
Wilson, who resides in Australia, is said to have told the council that he would be available for the hearing in Washington D.C. on November 8. However, Wright’s lawyers claimed that they had not been intentioned to consent to the deposition. In the document, the plaintiff explains:
The plaintiff further requests that Wilson and the defendant be granted permission to attend the meeting via video conference, and that the deposition is completed in a fortnight.
The news could also potentially be good news for the Bitcoin market. While speaking about the case with Modern Consensus on August 26, Wright explained that the origins of the legal battle came from the time when he worked with the late David Kleiman on cryptocurrencies. He reiterated that their work was instrumental to the development of Bitcoin, and should he have to surrender the Tulip Trust (a storage unit which contains the Bitcoins in dispute), he would still need to sell a huge chunk of it to pay off the 40 percent estate tax. As he put it, such a selloff would send the Bitcoin price into a downward spiral.
Wright still can surrender the Trust, but we will have to wait and see.