Craig Wright Found Not Liable for Breach of Kleiman Business Partnership

MIAMI — A federal jury found that Dr. Craig Wright, the Australian who claims to have invented Bitcoin, did not have a business partnership with deceased Florida computer forensics expert Dave Kleiman, but he does owe $100 million in compensatory damages for conversion to a company Kleiman founded in Florida, W&K Info Defense Research.

“I feel remarkably happy and vindicated,” Wright said in the courtroom hallway after the verdict. “I am not a fraud, and I never have been. I offered him $12 million many years ago, which if he had taken that then in bitcoin, when bitcoin was $200, and he kept it – you can do the math.”

Wright testified that he was friends with Dave Kleiman, and that Kleiman helped him edit a white paper that explained the foundation of Bitcoin (though Wright has never conclusively proved his alleged involvement in the cryptocurrency’s creation), but he insisted the two were not business partners. Dave Kleiman died in 2013 and his brother brought the federal civil lawsuit on behalf of Dave’s estate and W&K.

Of the verdict against W&K, Wright said it means “I owe my ex-wife more money.” He was referring to the fact that Ira Kleiman’s control of W&K is being challenged in court in Palm Beach County, where Wright’s ex-wife Lynn Wright and current wife Ramona Watts each claim to control a third of W&K and are suing Ira Kleiman, alleging he did not have authority to bring the federal suit. These cases have been on hold pending the outcome of the federal suit.

Vel Freedman, attorney for plaintiffs, said his team, too, was happy with the verdict: “We just won $100 million!”

It was far short of what he had asked for: up to $36 billion for the value of bitcoin in dispute, $126 billion for intellectual property and $17 billion in punitive damages.

Read More: Kleiman v. Wright: Bitcoin’s Trial of the Century Kicks Off in Miami

During the jury’s fifth week in the courtroom, it decided Wright and Kleiman were not in a business partnership, and thus the plaintiffs are not owed a portion of the partnership’s assets, which the plaintiffs believe to include about 1.1 million BTC and intellectual property such as software.

The jury did rule that Wright owes W&K Info Defense Research the $100 million for intellectual property, but did not define what intellectual property they believed Wright converted. Over the course of the trial, both the plaintiffs and Wright’s defense team described a variety of projects, including “testnet bitcoins” and white papers on subjects including hard drives and supercomputers, as intellectual property owned by W&K.

The jury was asked to consider damages in both bitcoin and dollars, but chose to award the $100 million in damages in fiat currency alone, writing “0 BTC” on the line for bitcoin damages.

Conversion is a form of theft that involves taking unauthorized control of another’s property.

The jury was asked to evaluate whether they believed:

Wright was liable to Dave Kleiman’s estate for breach of a business partnership;whether he was liable to the estate for conversion;whether he was liable to W&K (the joint venture) for conversion;whether the plaintiffs proved their case for civil theft;whether Wright was liable for fraud to the plaintiffs;whether Wright was liable for breach of fiduciary duty to W&K; andwhether Wright was liable for unjust enrichment against the plaintiffs.

Ultimately, the jury found Wright not liable for the majority of these charges.

‘Depressing’ outcome for Kleiman

Ira Kleiman was not in the courtroom today but told CoinDesk last week as the case dragged on, “I’m depressed. We thought they would return a favorable verdict in a day.”

Ira is a quiet man who has largely avoided the press, while Wright has a host of supporters who are active online. Feeling that his side of the story had been drowned out, Ira added a section to the website highlighting details from exhibits in his court case that he hoped readers would see.

These include emails Craig Wright wrote to various people, saying things like: “Dave Kleiman and I started mining in 2009. So we have a few things that will interest them. It is a shame Dave died last year before fruition, but all is moving ahead”; “I was not the person doing the mining. Dave was.”; and “Satoshi was a team. Without the other part of the team, he died.”

Ira was frustrated that  given such pronouncements, the jury hadn’t easily found in his favor.

However, his own lawyers had spent much of the trial insisting that Wright forged and backdated documents.

Wright’s defense team accused plaintiffs of “cherry-picking,” presenting the documents that fit their narrative as legitimate and others as forged.

It was clear the jurors were uncomfortable making decisions in this case. On Wednesday they said they could not agree on any of the counts, but Judge Bloom directed them to continue deliberating.

Wright told CoinDesk last week that Kleiman would have trouble collecting any verdict awarded to W&K, as his ex-wife and an entity tied to him own two-thirds of the company – a matter that is being litigated in court in Palm Beach County.

Catch up on the trial here:

In Craig Wright Trial, Plaintiffs Lay Out Pattern of Fraud, Deceit and Hubris

Day 4 of Kleiman v. Wright: Craig Wright’s Testimony Delayed

Day 7 of Kleiman v. Wright: Wright Tells Jury Kleiman Only Mined ‘Testnet’ Bitcoins

Kleiman v. Wright Trial: Craig Wright’s Flinty 4-Day Testimony Comes to an End

Kleiman v. Wright: The Trial Transitions From Plaintiffs to the Defense

Kleiman v. Wright: A Story of Physical and Financial Tribulation

Kleiman v. Wright: Defense’s Autism Expert Explains His Diagnosis of Craig Wright

Kleiman v. Wright: Craig Wright Takes Stand Again in Final Day of Testimony

Kleiman v. Wright: Jury Deliberations Continue in Week 2

Jury in Kleiman v. Wright Civil Suit Says It ‘Cannot Come to a Decision’

UPDATE (Dec. 6, 2021, 17:45 UTC): Updated with additional context.

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