The court heard from five witnesses as the defense begins to lay down solid groundwork for their argument on Day 11 of the Kleiman v Wright civil trial where up to half of 1.1 million Bitcoin currently priced at about $66 billion is at stake.
The plaintiff in the case is Ira Kleiman representing his brother David Kleiman’s estate and W&K Info Defense Research, LLC. Ira Kleiman is alleging that Craig Wright, the defendant, and David Kleiman were partners in the pseudonym Satoshi Nakamoto who wrote the Bitcoin white paper and that the two mined the 1.1 million Bitcoin through a business partnership in W&K Info Defense Research, LLC.
Hence, Ira Kleiman is demanding at least $11.5 billion or up to half of the Satoshi coins that are allegedly in the possession of Wright. The plaintiff may also be asking for punitive damages as Wright has been questioned about his net worth during his testimony for the plaintiff—something that is only done when punitive damages are in play.
The defense, on the other hand, is arguing that Wright alone wrote the Bitcoin white paper under the pseudonym Satoshi Nakamoto and there is no evidence that David Kleiman co-wrote it. There is also no operating agreement of a business partnership between David Kleiman and Wright in mining what has been dubbed as the Satoshi coins.
The plaintiff rested their case Tuesday, and true to the defense’s argument, no operating agreement of a business partnership or any kind of slam-dunk evidence has been presented that directly points to David Kleiman writing the Bitcoin white paper and mining the Satoshi coins with Wright.
What is more conspicuous is the fact that David Kleiman did not try to get credit for being Satoshi Nakamoto or lay claim to said coins when he was still alive. At the time of his death, the 1.1 million Bitcoin was already valued at over $200 million.
If Wright stole from David Kleiman, as the plaintiff is claiming, then the latter, who was a former police officer and computer forensics expert, should have gathered evidence and sued Wright, just like how his brother Ira Kleiman is now doing. But he did not do anything of the sort and only had good words to say about Wright in the pieces of evidence presented.
Day 11 starts off with the first witness for the defense, blockchain expert Kevin Madura, continuing his testimony as he is questioned by defense counsel Zalman Kass. Riddled with objections from the plaintiff’s side and Judge Beth Bloom sustaining the objections, Kass concludes his questioning earlier than expected.
Madura’s testimony ended with a cross-examination by plaintiff counsel Vel Freedman, pointing out the fact that although David Kleiman had no formal education and background in the C++ programming language that was used to code Bitcoin, he could have been self-taught.
“Is it possible that Dave Kleiman could teach himself C++?” Freedman asked.
“Yes,” Madura replied.
It is possible, although there is no evidence of David Kleiman teaching himself C++ as all of his electronic gadgets, which includes his laptop, hard drives and cellphone, have been reformatted, erased or given away by Ira Kleiman.
Also called to the stand was Nicholas Chambers, a computer engineer and computer scientist with a specialty in forensics. He examined five hard drives and nine thumb drives that belonged to David Kleiman.
According to Chambers, it’s impossible to recover what was originally on the drives because four of them had been reformatted and 13 had been overwritten by Ira Kleiman after David Kleiman’s death, and that these actions “fundamentally changed the contents of the drive and the ability to recover.”
Chambers further stated that three of the hard drives each contained an encrypted file labeled “Do Not Delete.” However, Ira Kleiman still decided to delete them all. If there is any evidence that can be gathered that can prove that David Kleiman was really a partner in the pseudonym Satoshi Nakamoto and mined the Satoshi coins with Wright, they can never be recovered from his personal drives.
Lynn Wright is Craig Wright’s ex-wife and the major shareholder in W&K Info Defense Research, LLC. A video deposition is shown to court wherein Lynn Wright clearly states that Craig Wright and David Kleiman were not in any kind of partnership when it comes to writing the Bitcoin white paper or mining the 1.1 million Bitcoin allegedly through W&K Info Defense, LLC.
Lynn Wright also testified that W&K Info Defense, LLC was set up in the United States to get contracts from the Department of Homeland Security by submitting white papers on information security. The entity made use of David Kleiman and his status as a disabled veteran so their cyber security white papers will be noticed. However, nothing panned out from the submitted white papers.
According to Lynn Wright, David Kleiman was sick and in the hospital most of the time that he was not able to fully work in the company, to the point that she was not sure if David Kleiman was even able to submit the white papers to the Department of Homeland Security.
On a side note, after the Kleman v. Wright case is over, there is still a probate case wherein Lynn Wright is suing Ira Kleiman, claiming that the latter does not have a controlling right to W&K Info Defense, LLC. So, even if Ira Kleiman wins the Kleiman v. Wright case, he will not be able to see one Bitcoin until after the probate case is over.
A video deposition of Donald Lynam, Craig Wright’s maternal uncle and role model, was next. He was a former Royal Australian Air Force (RAAF) Wing Commander and led the group who developed several significant management systems that are still being used by the RAAF today.
Lynam’s testimony is significant to the defense as it establishes how Wright gave his uncle a rough draft of the Bitcoin white paper a few months before its release. According to Lynam, David Kleiman was also not mentioned by Wright in relation to Bitcoin.
“I think the actual determination of the actual name [of the paper] was still floating at the point I got the white paper, Lynam testified, but it was clearly to be a digital monetary system…I have no doubt in my mind that that was the precursor because it had the same content as the paper that came out, or very similar content,” Lynam said in his deposition.
Lynam also testified that Wright told him about using Satoshi Nakamoto, a combination of the names of two Japanese philosophers, as a pseudonym. Through Lynam’s father, who often traveled to Asian countries like the Philippines and Japan, Wright became fascinated about Japanese culture.
“If I didn’t think that absolutely honest answers would be of assistance to Craig, I probably would have said that I don’t want to depose… I agreed to do it because I have so much faith in Craig and my knowledge of what happened through that time that I have high confidence that Craig has behaved correctly and my understanding of it is correct, and I can answer all the questions with absolute honesty,” Lynam replied during his cross-examination when the plaintiff’s counsel urged him to admit that he was asked to speak nicely about his nephew.
Dr. Stewart MacIntyre
Dr. Stewart MacIntyre, whose specialty is in infectious diseases, is called to the stand. Dr. MacIntyre has reviewed David Kleiman’s medical records, which he states was at least 10,000 pages.
Dr. MacIntyre has just begun his testimony before the court adjourned for the day. So far, the doctor testified that David Kleiman was mostly in the hospital for the last two and a half years of his life, spending just about three weeks in total out of the hospital.
According to the doctor, because David Kleiman was paralyzed from the waist down, was suffering from a MRSA infection and had no control of his bladder, among other things, David Kleiman could not be away from the hospital for more than one day.
David Kleiman’s condition seems to allude to the fact that he was not in any condition to manage a mining facility as the plaintiff is alleging in the last two and a half years of his life. Dr. MacIntyre will continue his testimony tomorrow.
All in all, Day 11 of the Kleiman v Wright trial has been a good day for the defense. Wright’s uncle, especially, illustrated the more human side of Wright, even showing how being a computer scientist runs in the family.