WRIGHT: ‘Biggest whale ever’ set to dump $2 billion of Bitcoin

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A judge last night ordered Dr Craig Wright to hand over 550,000 Bitcoin. Wright predicts $2 billion BTC will need be dumped to cover estate tax, ‘tanking’ the market.

Overnight, news emerged that Southern District Court of Florida magistrate Bruce Reinhart recommended the estate of Dave Kleiman be awarded 50% of the Bitcoin, and intellectual property, Dr Craig Wright held prior to 2014.

Wright is being sued by Ira Kleiman – bother of Wright’s late business partner Dave – for attempting to appropriate more than a million BTC held in a family trust.

The order is not yet publicly available and the case is not yet over, with a number of procedural issues to iron out.

But in an interview straight after leaving court, Wright predicted the order would crash markets.

“The judge ordered me to send just under 500,000 BTC over to Ira. Let’s see what it does to the market. I wouldn’t have tanked the market. I’m nice.”

“I will comply with the order”.

There are doubts over whether Wright can access that Bitcoin stash.

Estate tax bill of 40%

Wright said the court’s ruling meant Kleiman’s estate would be liable for estate tax of 40%.

That means around $2 billion worth of BTC may need to be sold to pay the tax bill.

“The courts ruled that Dave inherited the $5 billion,” he said. “Now he has to pay estate tax on that if he wants it.”

Although there has been speculation Wright may need to sell off Bitcoin SV to cover the court’s order, he said Bitcoin SV would be unaffected.

He also believes the order does not capture the equivalent amounts of Bitcoin Cash and Bitcoin SV generated in subsequent hard forks – likely a relief to supporters of those projects.

Don’t kick a gorilla in the nuts

Wright said he’d been perfectly content to sit on the Bitcoin stash ever since mining it.

Craig Wright

“Everyone wants to hate on me. This is the result. If you’d left me alone, I would have sat on my f*cking money and you wouldn’t have to worry.

“And the biggest whale ever has to dump because he has to pay tax. It’s not a transfer. Florida has an estate tax.”

“I sat on $10 billion and didn’t touch it. And this is what happens. When you find a gorilla, don’t kick it in the nuts.”

Data from Chainalysis suggests 36% of the entire Bitcoin supply is either lost of unmined – which leaves 13,440,000‬ BTC in the world.

That means if Wright is able to produce the BTC, Kleiman’s estate will own almost 4% of the entire circulating supply.

How we got to this point

Judge Reinhart found the over the course of a year-long court battle Wright had acted in contempt of court, perjured himself, and falsified documents.

While the judge made no comment on whether Wright really is Satoshi Nakamoto, the lawsuit is largely predicated on the idea that Wright and Kleiman are the men behind the pseudonym.

Wright’s sister Lisa N Edwards Tweeted earlier today that the case is not yet concluded and that the people claiming the court had ruled that Wright was not Satoshi were spreading rumours.

“If Dr Craig Wright is NOT #SATOSHI… how does he give 50% of something the court APPARENTLY ruled he didn’t do??” she asked.

Bitcoin SV
Lisa Edwards (left) and her brother Craig Wright (right).

Peter McCormack, currently being sued by Wright for calling him a fraud tweeted with glee at the court order: “Hahahahahahahahahahahahahahaha see you in Malta you melt!”

Both Wright and McCormack are scheduled to speak at the Malta Blockchain Summit, with McCormack’s presentation titled “Craig Wright is a Fraud”.

Where is the BTC coming from?

During the case, Wright claimed he didn’t have access to the 1.1 million Bitcoin as it’s held in a blind trust called the Tulip Trust.

There are 15 key slices held by different people with eight needed to access the funds.

According to Wright, a bonded courier will appear one day in 2020 handing out the key slices.

Presumably, Wright’s other option to pay up would be to sell off Bitcoin SV – however, the entire market cap of Bitcoin SV is $2.35 billion, which is less than the amount owed.

Bitcoin SV has lost about 2.5% over the past 24 hours, so the reaction has been muted.

Where to from here?

Judge Reinhart’s order will have to be adopted by District Judge Beth Bloom before becoming final.

Wright will not be entitled to a jury trial and cannot oppose the Judge’s order, though he can and almost certainly will appeal.

UPDATE: Bloomberg is today reporting that Wright has been ordered to hand over 410,000 Bitcoin rather than 550,000. That would make 40% equate to around $1.7 billion rather than $2 billion.

There are also claims that, a) Florida doesn’t have an estate tax (which is true, however there is a Federal Estate tax of 40%) and, b) that the tax would be levied on the value of the coins at the time of death in 2013.

According to Investopedia though:

“With assets you inherit, the cost basis is usually equal to the fair market value of the property or asset at the time of the decedent’s death or when the actual transfer of assets was made.”

Estate Tax is also apparently taken out by the authorities before it is received.

Of course, all this could be a moot point considering even the Judge seemed unconvinced Wright even engaged in mining or has access to such an enormous stash of Bitcoin, but made the order anyway.

Watch this space, for further updates on the world’s weirdest court case. 

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