Bitcoin embroiled in £3.5bn legal battle

A man claiming to be the inventor of bitcoin has launched a blockbuster lawsuit to recover £3.5billion of the digital currency allegedly stolen from him.

Craig Wright, an Australian computer scientist who lives in Surrey, is trying to sue the developers of bitcoin for his missing money.

Wright lost his bitcoin after hackers wormed their way into his personal computer, and stole ‘keys’ to the addresses of two accounts holding substantial quantities of the currency.

Craig Wright, an Australian computer scientist living in Surrey who claims to be the inventor of Bitcoin, is hoping to recover £3.5bn of the digital currency allegedy stolen from him

He has now engaged law firm Ontier to pursue the software developers who created the system which bitcoin operates on, claiming that they should be able to regain control of the coins which were taken from him. 

Ontier yesterday sent formal ‘letters before action’ to the developers, alerting them of the legal action.

Paul Ferguson, a partner at Ontier, said: ‘Our client always intended bitcoin to operate within existing laws, notwithstanding the original ethos of independence he envisaged for the digital currency.

‘We assert there are identifiable legal obligations attributable to those who develop and control bitcoin.’

Wright and his lawyers will argue that the developers were either negligent in allowing the bitcoin to be taken, or had a ‘fiduciary duty’ to him which they breached.

This is a strict legal relationship, usually reserved for company directors, and would mean that the developers had committed to act in the best interests of bitcoin owners, creating a duty of loyalty and care.

But Wright’s claims may be complicated by the fact that no one knows if he truly is the creator of bitcoin.

The idea for the currency was first outlined in a white paper published in 2008 under the pseudonym Satoshi Nakamoto.

A number of people have been linked to the pseudonym, but none have been confirmed as the real Nakamoto.

Wright came forward as Nakamoto in 2015, and in 2019 he started pursuing libel cases against people who disputed his identity and called him a fraud. 

Although Nakamoto created the idea of bitcoin, which relies on an online ledger called the blockchain where all transactions are irreversibly recorded, he was not responsible for its development.

He created its software as an open-source code, meaning anyone with the know-how can contribute. Wright has identified 16 individuals who have contributed as key developers.

Rather than demanding the money from them, he wants them to use the software to return his stolen coins.

Wright’s claim is the subject of an investigation by the cyber crime division of the South East regional organised crime unit.