Bitcoin’s Biggest Controversies Converge as Lawsuit Pits Craig Wright Against Tether

by
Ali Martinez
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• Craig Wright claims to have invented bitcoin, and he’s suing a podcaster who alleges otherwise.
• Wright’s lawsuit now faces a challenge from the creator of the fourth-largest cryptocurrency.
• Bitcoin’s most thrilling scandal continues to grow more and more exciting.

As if the Craig Wright saga couldn’t grow any more mesmerizing, the most controversial person in the bitcoin industry now finds himself squaring off against the most controversial company in crypto.

Tether, the issuer of $4.1 billion cryptocurrency USDT, announced that it would stand behind podcaster Peter McCormack in a lawsuit brought by Wright, who claims to be Satoshi Nakamoto.

Tether Pledges to Help Defend McCormack

Stuart Hoegner, Tether’s general counsel, said on Twitter that Wright had ample opportunities to prove he is Satoshi Nakamoto. Enough, he said, is enough.

Wright has had myriad opportunities to prove that he is Satoshi and has not definitively done so.

Due to Wright’s inability to prove his claims, Hoegner stated that Tether would “stand behind” McCormack in his “defense of litigation” in the United Kingdom.

Hoegner declined to comment further on the case, but he tweeted that the company would fully support McCormack’s defense on the “frivolous and vexatious litigation.”

Litigation can be drawn-out and expensive, but we are committed to the long game. We admire Peter’s conviction and are humbled to support his defense against what we see as frivolous and vexatious litigation.

The Legal Battle Grows Increasingly Bizarre

Tether’s lurch into the fray is the latest surprise twist in the lesser-known of Craig Wright’s two high-profile lawsuits, the other being the multibillion-dollar suit brought against him by the estate of Dave Kleiman.

Wright sued Peter McCormack, the host of the What Bitcoin Did podcast, for libel back in April. The suit came after McCormack challenged Wright’s claim that he was the one who invented bitcoin.

McCormack called Wright’s bluff.

He offered to agree to all terms and settle the case for £250,000 – his entire net worth. The only thing Wright would have to do is send him $1 worth of bitcoin from the Genesis block.

McCormack said (in a now-deleted tweet):

I’ve totalled up all my stuff—house, car, Bitcoin, clothes, Metallica records. I reckon I can pull together £250k. I’ll give you all that. You incur no legal fees. I will bow at the CSW alter if you send me $1 of Bitcoin from the Genesis block.

The case has only grown more bizarre from there.

For example: In August, Wright uploaded a paper supposedly written in 2007 to the SSRN database. The date is important since the paper echoes the very first line of the original Bitcoin whitepaper. However, a check of its metadata – performed by McCormack – revealed the creation date to be August 2019 – not 2007.

The Crypto Community Stands Against Wright

While McCormack continues to vociferously maintain his innocence, mounting a competent legal defense is an obscenely expensive endeavor.

He explains,

For full support from an expert lawyer, the cost for the initial defense is estimated at around £25k – £50k. If this goes to a full trial, the worst case to defend would be £500k – £750k. If I lose, it could be double that as I would have to pay CSW’s legal fees (£1.5m).

Luckily for him, an incredible number of people in the crypto community have shown their support, like Tether is doing now.

Changpeng Zhao, the CEO of Binance, attacked Wright as a “fraud” and even delisted bitcoin sv (BSV) from the exchange. Zhao also offered to donate $10,000 worth of binance coin (BNB) to pay McCormack’s legal fees.

Along the same lines, bitcoin developer Jameson Lopp offered to fly to the UK and testify in court against Wright.