WizSec Case Study on Craig Wright vs Dave Kleiman: Satoshi’s Bitcoin that Never Existed?


More Controversy Over the Bitcoins in the Dave Kleiman Versus Craig Wright Case: They Don’t Exist

The case between the estate of Dave Kleiman and Craig Wright has gripped the crypto community since the beginning of the year. We just learned new details about the bitcoins involved in the dispute: those bitcoins might not exist. In fact, those bitcoins might have never existed.

The issue was first spotted by the bitcoin security experts at WizSec back in February when details of the court case first appeared online. The documents revealed to the public highlight a number of mysterious wallet addresses where the missing bitcoins are alleged to be hiding.

Last week, we mentioned that one wallet was associated with Mt. Gox. In other words, Craig Wright was trying to claim that the wallets he and Kleiman mined ended up in a Mt. Gox bitcoin wallet – which seems unlikely.

New research, however, has revealed that none of the addresses in the court documents have a connection to Wright or Kleiman.

In fact, it seems likely that Wright looked at a “rich list” of bitcoin addresses and randomly selected several top addresses.

The ongoing lawsuit alleges that Craig Wright owes the estate of Dave Kleiman $10 billion. Craig Wright, the Australian man who has previously claimed to be Satoshi Nakamoto, partnered with American computer security specialist Dave Kleiman in the early days of the bitcoin network. The pair allegedly mined over one million bitcoins in 2009 and 2010. It’s also possible that both Wright and Kleiman developed bitcoin and both used the Satoshi Nakamoto identity. The lawsuit, in fact, specifically claims that both Wright and Kleiman developed bitcoin along with an unnamed third party.

The whole case revolves around 1,100,000 bitcoins. These bitcoins were worth a few hundred thousand dollars when Wright and Kleiman first mined them. Today, the sum is worth billions.

Where Are the 1.1 Million Bitcoins?

The court documents reveal the locations of the 1.1 million bitcoins. WizSec decided to investigate each of the wallets listed in the court documents,

One wallet (exhibit 4 in the court documents) is found at 1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a. Blockchain.com will tell you that address has received 111,114 BTC. The court documents allege that these bitcoins were “held in escrow” as part of a BTC transfer from Kleiman to Wright in exchange for shares in a new company. However, this wallet address is associated a random Mt. Gox user. As WizSec explains, the wallet address “has nothing to do with either Kleiman or Wright.”

Another wallet, exhibit 10 in the court documents, can be found here: 12hRmmSda9qSSEH656zBaKEbeisH6ZhdTm

Craig Wright claims to own that wallet address and claims he used it to lend Kleiman 50,000 BTC as part of a software development licensing and financing agreement. However, this is actually an internal Mt. Gox address. WizSec connects the address directly to Mt. Gox CEO Mark Karpeles’s famous proof of solvency transaction in 2011.

There’s another unusual connection to Mt. Gox. Craig Wright claims to own the bitcoin wallet here: 12C9c9VQLMrLi4Ffzq2wDvwrKnUPaAaNFp

That wallet contains 250,000 BTC and is mentioned in the court documents as exhibit 10. Craig Wright claims to own that wallet and claims it was used for a 250,000 BTC loan.

In reality, however, Craig Wright doesn’t own the wallet at all:

“However, this address actually belongs to original MtGox founder Jed McCaleb,” explains the investigation team at WizSec.

26 other wallet addresses are mentioned in the court documents. WizSec looked through all of the wallets to find any connection to Craig Wright or Dave Kleiman.

Of the 26 wallets, 10 of them have a direct connection to Mt. Gox. Several of the wallets listed in the court documents belong to Mt. Gox users, for example. Four of the wallet addresses are Mt. Gox cold storage locations.

Other wallet addresses linked in the court documents belong to early miners. One is associated with a BTC-e deposit address. Most wallet addresses, however, are unknown.

None Of The Addresses In The Kleiman vs. Craig Wright Court Documents Are Linked To Wright

By the end of WizSec’s analysis, they reach a surprising conclusion:

“Even with many of the address owners unnamed, this is clearly not a list of assets held in some trust. Even a single address claimed but apparently belonging to someone else would be a big red flag, and here we have more than a handful of cases I can very confidently state have nothing to do with Wright.”

In another shocking development, several of the addresses named in the court documents did not yet exist or hold any bitcoins as of the purported date of the document (October 2012). Some of the addresses did not show up until mid-2013. Wright claims that he and Kleiman signed a transfer agreement in October 2012 where Kleiman agreed to send BTC to Wright in exchange for shares in a shell company in Australia.

Wright, by the way, did have a Mt. Gox account. In fact, both Wright and Uyen Nguyen – the 24-year old Vietnamese lady who was also involved in the bitcoin transaction – had Mt. Gox accounts. Wright’s Mt. Gox account was #433804 while Nguyen’s was #465042. Wright used his account briefly to buy bitcoins in April 2013, then sent those bitcoins to Nguyen. Nguyen’s account had no activity aside from receiving BTC from Wright.

Wright Allegedly Browsed a Bitcoin Blockchain Rich List and Picked Random Addresses

At the end of the day, it’s not hard to determine what happened here.

All of the dozens of bitcoin addresses mentioned in the court documents seem to come from random sources. However, they have one thing in common: at some point, they all held enormous amounts of bitcoin inside. In the early 2010s, these addresses were some of the biggest and richest on the public bitcoin blockchain.

In preparing the court documents, Craig Wright might have simply looked at a “bitcoin rich list” and listed some of the biggest addresses at the time, as WizSec explains:

“This isn't some grand conspiracy of having stolen a million bitcoins, it's some guy browsing a “blockchain rich list”, picking out a couple of addresses at random and saying “I own those” for whatever reasons, while offering no evidence except for some clumsy document backdating. These claims would never have gotten past an actual specialist.”

It’s no secret that several of the wallet addresses listed in the Wright v. Kleiman court documents seemed unusual, or that one or two were connected to Mt. Gox. WizSec’s analysis, however, reveals that none of the addresses has any apparent connection to Craig Wright or Dave Kleiman. It appears Wright may have picked random wealthy bitcoin addresses to support his claim.

The controversy between Wright, Kleiman, and the identity of Satoshi Nakamoto continues to unravel. One thing seems certain, however: the bitcoin addresses listed in the court documents never belonged to Craig Wright or Dave Kleiman and they certainly don’t show a “trust” containing 1.1 million bitcoins.

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