Dr. Craig Wright is suing crypto exchanges Coinbase (NASDAQ:COIN) and Kraken for passing on fake Bitcoin in connection with their use of the name Bitcoin in connection with assets that do not comply with the regulations described in the white paper. According to a claim form released today, the claim is worth hundreds of billions of pounds.
On Friday, ONTIER LLP on behalf of Dr. Wright, Wright International Investments Limited (WII) and Wright International Investments UK Limited (WIIUK) submitted a claim form to the English High Court, to formally commence the suit. The full details of the claim will not be known until the most substantial details of the claim are provided in the near future in accordance with the English Rules of Civil Procedure.
In the claim form, Dr. Wright accuses the exchanges of “passing on” projects that are incompatible with the Bitcoin system he describes in the white paper, harming his interest in Bitcoin by up to hundreds of billions of pounds. He is requesting an injunction restricting Coinbase and Kraken from continuing to pass on digital assets such as Bitcoin as well as damages.
Simon Cohen of ONTIER said in a statement:
“These actions are undoubtedly a game changer for the digital asset market. Simply put, the claimant assertion is that if your digital assets do not strictly adhere to the Bitcoin protocol and are tied to the Bitcoin blockchain it is not Bitcoin, and should not be marketed or referred to as such. Product selection A vital driver of innovation – but asset owners must be aware of exactly what they are buying, and stability comes from transparency.”
Dr. Wright said:
This is about protecting the consumer from fraud and deception. Consumers are misled daily into believing that BTC is Bitcoin as explained in the Bitcoin White Paper. BTC is not Bitcoin. I want to correct consumer deception, using the appropriate legal channels and ask those exchanges in operation to stop passing BTC as Bitcoin, change the name, clarify in their communications, and list BSV as Bitcoin.
BTC is in no way related to the system I outlined in my Bitcoin white paper that I released in 2008. BTC Core engineers have significantly modified the code to a point where it is not, and cannot be considered Bitcoin. BTC is passed on as Bitcoin. Consumers need to be protected from this misleading activity that these exchanges/developers are doing for their own financial benefit.
Bitcoin has always been designed to be a peer-to-peer electronic cash payment system, not a store of value. While this is very likely the highest claim ever brought before English courts, in reality, the arguments in support of our clients’ position are clear and verifiable.”
Given that this lawsuit has the potential to invalidate the biggest profitable cow for these exchanges – BTC – the news is significant. As a publicly listed company on NASDAQ, Coinbase must comply with the exchange’s disclosure rules, which include a requirement to promptly disclose to the public any information that might reasonably affect the stock’s value or future prospects.
Kraken is believed to be in the process of being released to the public and is similarly obligated to disclose the implications of the lawsuit. The exchange also made a lot of noise about being granted a Wyoming Special Purpose Depository Corporation (SPDI) charter, which put him under the direct scrutiny of the Wyoming Banking Commission.
The action appears to be the corollary of letters sent to a handful of cryptocurrency exchanges in 2021, warning them about promoting products using the Bitcoin name. Although claim forms have only been submitted in relation to companies within the Coinbase and Kraken groups of companies at this point, these letters indicate that there may be more lawsuits to come.
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