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Abu Dhabi, UAEFriday 14 December 2018

Bitcoin 'inventor' accused of $5bn fraud and forgery

Craig Wright is accused of using phoney contracts and signatures to lay claim to Bitcoins mined by colleague Dave Kleiman

Family of businessman say he was swindled of Bitcoin fortune. Marco Bello/Reuters
Family of businessman say he was swindled of Bitcoin fortune. Marco Bello/Reuters

Craig Wright, the self-proclaimed inventor of Bitcoin, is accused of swindling more than $5 billion worth of the cryptocurrency and other assets from the estate of a computer-security expert.

Mr Wright, who claimed in 2016 that he created the computer-based currency under the pseudonym Satoshi ‎Nakamoto, allegedly schemed to use phoney contracts and signatures to lay claim to Bitcoins mined by colleague Dave Kleiman, another cryptocurrency adherent, who died in 2013, according to a lawsuit filed by Mr Kleiman’s brother.

Mr Kleiman’s family contends they own the rights to more than 1 million Bitcoins and blockchain technologies Mr Kleiman mined and developed during his lifetime and that the assets’ value exceeds $5bn, according to the February 14 filing in federal court in West Palm Beach, Florida.

“Craig forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him,’’ lawyers for Mr Kleiman’s family said in the complaint. “Craig backdated these contracts and forged Dave’s signature on them.’’

Mr Wright, an Australian who lives in London, couldn’t immediately be reached for comment on the suit, which also accuses the entrepreneur of violating partnership duties to Mr Kleiman and unjustly enriching himself at his colleague’s expense. There is no attorney listed for Mr Wright on the docket.

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Mr Wright and Mr Kleiman formed a Florida-based company, W&K Info Defence Research, in 2011 to focus on cybersecurity, according to the court filing. The pair also had earlier worked together on the development of Bitcoin and had extensive mining operations, according to the family’ s lawsuit.

The pair controlled as many as 1.1 million Bitcoins at the time of Mr Kleiman’s death, according to the suit. They were held in trusts set up in Singapore, the Seychelles Islands and the UK, the suit says.

Mr Wright said in a 2016 blog post and interviews that he was the main participant in a team that developed the original Bitcoin software under the pseudonym Satoshi Nakamoto. After septics questioned the claims, Mr Wright said that he decided not to present any further evidence to prove that he was the creator of Bitcoin.

In the filing, Mr Kleiman’s brother includes what he says is email traffic between himself and Mr Wright in which the entrepreneur indicates he may have been holding 300,000 of Mr Kleiman’s Bitcoins.

Mr Kleiman “mentioned that you had 1 million Bitcoins in the trust and since you said he has 300,000 as his part’’, the computer expert’s brother wrote, “I was figuring the other 700,000 is yours. Is that correct?”

“Around that,” Mr Wright wrote back. “Minus what was needed for the company’s use.”