The Breakdown - Judge Confirms: We Are All Satoshi. Except Craig Wright.

Episode Date: March 15, 2024

Rejoice! A lawsuit from COPA has led a UK judge to declare that Craig Wright is not, and never has been, Satoshi Nakamoto. Today's Show Brought To You By Kraken - Go to https://kraken.com/thebreakdown and see what crypto can be Ledger - 5% to Bitcoin Developers When You Buy https://shop.ledger.com/pages/bitcoin-hardware-wallet Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Friday, March 15th, and today we are talking about why, legally speaking, it is official. Craig Wright is not and never was Satoshi Nakamoto. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.L.Y slash breakdown pod. Hello, friends. For those of you who have been watching the endless saga of Craig Wright,

constantly suing anyone who says he isn't Satoshi, yesterday was a very vindicating day. However, before we get into that, I have to make mention a little bit of the price action, which is some of the worst we've seen in a couple of weeks. Bitcoin fell off a cliff overnight, suffering a 7% drawdown to bring the price under 67,000. Over 500 million in liquidation. were processed as leveraged traders watched some of the gains of the last few weeks melt away. There had been some concern during the day about a string of hot inflation data, which have likely pushed Fred rate cuts even farther back. We're even starting to hear murmurs that an additional rate hike could be needed to snuff out inflation.

The more proximate cause, however, was ETF flows. The sell-off began as preliminary figures trickled in and they were ice-cold. Most funds put up a zero on Thursday, with Fidelity recording just 13.7 million worth of inflows. That was a new low, but still the best performer of the first batch of numbers. Grayscale recorded $257 million in outflows, which is right around their long-term average. Although BlackRock hadn't reported at that point, markets had seen enough and began to sell off. Once BlackRock reported an hour later, the results were solid, but still comparatively unimpressive.

Ibit gathered $345 million worth of inflows, enough to give Thursday $132 million in net inflows. That was the lowest total in two weeks, massively underperforming the recent trend. Of course, a narrative is forming that ETF inflows have cooled down, but we'll have to wait a few more days to see if it was an anomaly. But with that, let's move to our main topic. The verdict is in, Craig Wright is not Satoshi Nakamoto. The trial between Wright and the Crypto Open Patent Alliance, or Copa, has been ongoing for the past six weeks. The purpose of the trial was to determine once and for all, whether Wright is Satoshi and bring an end to his abusive lawsuits. For several years, Wright has been suing prominent members of the Bitcoin community, including several core developers.

The legal actions range from copyright infringement to defamation, but all hinge on rights assertion that he is the pseudonymous Bitcoin founder. Closing arguments wrapped up yesterday with the judge wasting no time coming to a decision. He delivered his verdict from the bench within seconds of the end of the trial, stating, having considered all the evidence and submissions presented to me in this trial, I've reached the conclusion that the evidence is overwhelming. Therefore, for the reasons which will be explained in that written judgment in due course, I will make certain declarations which I am satisfied are useful and are necessary to do justice between the parties. First, that Dr. Wright is not the author of the Bitcoin white paper.

Second, Dr. Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period 2008 to 2011. Third, Dr. Wright is not the person who created the Bitcoin system. And fourth, he is not the author of the initial versions of the Bitcoin software. End quote, drop Mike. This will be followed by an extensive written judgment in due course, but for most of the crypto community, this is all we needed to hear. One thing to watch out for, once the written decision is published, is whether the judge will declare right to be a vexatious litigant. The designation would mean right would be required to ask for permission from the court before filing any more lawsuits. It's reserved for people who abuse the legal system by filing baseless

lawsuits. Understandably, the Bitcoin community is celebrating the ruling. Block CEO Jack Dorsey was one of the key people who put together Copa to fight this lawsuit. He simply tweeted out the judge's statement, adding an understated W. Many Bitcoiners also thanked Dorsey for his efforts in bringing about this conclusion. Spiral, the Bitcoin Division of Block, added some detail about why Copa was founded in late 2020, tweeting, Small Victory Lap. Block designed Copa to keep foundational Bitcoin Tech open for all. We kept hosting the white paper and chose not to be intimidated by right cease and desist letters. In 2021, Copa filed a lawsuit to stop the harassing C&Ds, the results of which came down today. Coinbase was another member of Copa. Their chief legal officer, Paul Gruel,

had obviously been storing his rage up for a while, tweeting, enough of this. The Honorable Court has resolved this farce once and for all. Apologize Mr. Wright to every developer, builder, and Bitcoin community member who you harassed and bullied with your lies and false demands. Apologize now. Cracken, another major contributor to Copa tweeted the most common sentiment of the day, We are all Satoshi, except Craig Wright. Now, if you look hard enough online, I believe you will be able to find a shirt that says something similar. The one that I've seen is, in fact, a little bit more colorful, and reads, We are all Satoshi, except Craig Wright,

fuck that guy. Today's episode is brought to you by Cracken. For far too long, the whole financial system has been standing still, too slow, only on for certain hours, overly designed for some types of people, but not for others. Crypto, at its best, represents progress.

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Disclaimer, not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to U.S. and U.S. territory customers by Payward Ventures Inc. PVI, PVI, DBA, CRAQ, HECA, Cracken. Hello, Breakers. Today's episode is sponsored by Ledger. As another cycle ramps up, it's another chance to think about your Bitcoin custody best practices, and of course, to help all the new folks do the same. Ledger is the global platform for securing Bitcoin and other crypto.

Ledger combines both hardware wallets and the Ledger Live app to offer the best way to buy, sell, swap, and stake without sacrificing on security or self-custody. Ledger features cutting-edge technology in the form of a certified secure chip and a proprietary operating system, but also brings ease of use. This makes Ledger a safe and secure way to manage your digital assets without all the stress. Check out the link to the Bitcoin Ledger Nano in the show notes. 5% of all sales of the Bitcoin Ledger Nano go to support Bitcoin development. Thanks once again to Ledger for supporting the breakdown. The people who Craig Wright harmed by dragging them through baseless lawsuits at great expense

also had their moments of catharsis. Peter McCormick, the host of what Bitcoin did, spent over two years in litigation with Wright, ultimately losing the defamation case but paying a nominal penalty of only one pound. Peter wrote, we are all Satoshi except Craig Wright, who is literally the only person who isn't confirmed by law. Holdenot, who was just a bitcoiner on Twitter before Wright came along told his story, tweeting, March 29th, 15 days from now, marks five years since I received the first legal letter from Craig Wright's lawyers via DM on Twitter. They demanded I apologize and that I recognize Craig as Satoshi. Today, UK court ruled that Craig Wright is officially not Satoshi Nakamoto. My tweets have aged well. I stood by them in court. I stand by them now.

They failed in crushing me. They failed in everything. They didn't anticipate what Bitcoiners are made of. This judgment doesn't automatically end the two ongoing cases they have against me, but it automatically ushers in the official reality of what Craig is and isn't. I think my long battle will soon be over. I will celebrate today, but the final celebration will be when I no longer have legal cases to deal with from these terrible people. Thank you so much to everyone who has supported me all this time. Haudelnott estimates that he has spent more than $3 million in legal fees over the five years. Perhaps the most serious harm was done to Bitcoin developers, with most of them retiring or going into hiding in 2021 as a direct result of rights lawsuits. Their comments focused on thanking

the people who stood up to the fight. Peter Todd summed it up best, tweeting, there were many people who helped us win, but I want to call out my fellow developer defendants Gregory Maxwell and Peter Woolley in particular, because their hard work allowed the rest of us to spend more time focusing on our actual work on Bitcoin. With the threat of a defamation lawsuit now lifted, a huge amount of people took the opportunity to declare loud and clear that Wright is not Satoshi. Developer Lawrence Day tweeted, get effing dunked on Craig Wright. It is now legal to say loud and clear you're a fraud and a liar, and your favorite weapon, vexatious litigation is beyond you in the UK. May you choke on your indignant rage. At this point, Craig Wright still has a pinned tweet claiming

to have created Bitcoin, but it now has a very helpful community note attached. Well, it may look like the fight is finally over for the Bitcoin community, the problems for Craig Wright may only be getting started. We don't know what the damages from this lawsuit will be, let alone the case against Haudelnot, which is yet to be decided. It's entirely possible that Wright could be ordered to repay millions in legal costs. Throughout this trial, Wright was accused of fabricating evidence and lying under oath numerous times. In their closing arguments, Copa said they would be referring Wright to UK prosecutors, quote, for consideration of prosecution for the offenses of perjury and perverting the Court of Justice. It's not unthinkable that criminal charges could follow.

Wright has wasted a massive amount of time in front of UK judges over the years with lawsuits that were now found to be based on a lie. I think Nick Carter really put a capstone on this whole thing when he tweeted, it's very amusing that the person who has tried the hardest to convince the world he is Satoshi is the only person on the planet. A court has said, is specifically not Satoshi. Honestly, friends, I could leave it there and it would be a happy day, but let's give you a little bit more content just to round us out for the week. Crypto Venture Firm Paradigm have released the results of polling they conducted earlier this month.

The poll surveyed 1,000 voters with a focus on unpacking issues around crypto and figuring out just how impactful the crypto vote will be in November. The poll found that around 19% of respondents said that they bought crypto in the past. There wasn't a significant difference between the numbers for registered Democrats and Republicans, but 24% of independents said they had bought crypto. Paradigm wrote, Crypto owners are a much bigger segment of the electorate than is often appreciated among policymakers. A fifth of the country is not a niche subgroup. The polling found that crypto ownership was much higher among men and minority groups. It also uncovered that people with a

college degree were far more likely to own crypto than those who attained both higher and lower levels of education. One of the most glaring findings was that 69% of Americans are dissatisfied with the current financial system. This dissatisfaction was especially notable among conservatives and registered Republicans. That makes financial systems reform a clear winner as a political message, especially on the right. The polling dug a little deeper on the level of crypto ownership among voters, finding that 7% of voters said that they owned more than 1,000 worth of crypto, with 1% stating that they own more than 10,000. A further 16% of voters said that they plan to buy crypto. Those numbers might sound small, but the same question was asked about stock ownership.

Only 12% of voters said that they own more than 1,000 in stock, meaning that significant crypto investment is about a quarter as common as stock ownership. Again, this is no longer a niche subgroup. We're talking about millions of voters. The survey also showed that as of now, neither party has delivered a winning message on crypto. Forty-nine percent of voters said that they don't trust either party when it comes to crypto policy, including 40 percent of registered Democrats and 30 percent of registered Republicans. Paradigm wrote, The lack of trust voters have in either party on this subject shows that there is an opportunity for both parties electorally if they focus their time and intention on crafting comprehensive policy proposals on crypto.

There was, however, a clear preference among crypto voters when it came to the presidential vote. 48% of crypto owners said they would vote for Trump, while only 39% said they would vote for Biden. 13% were undecided. Voters who didn't own crypto were basically neck and neck, polling at 44% for Trump and 43% for Biden. This represents a big swing from 2020, when Biden secured the support of the crypto vote. 43% of crypto voters recalled voting for Biden, while only 39% recalled voting for Trump. Trump. Paradigm summed up their results by stating, the data collectively shows that

crypto owners are themselves a swing vote demographic, one that could be decisive if the election is yet another razor-thin race. To many, this wasn't really all that surprising. Developer David Vorick writes, the Biden administration has made life hell for builders in crypto. Of course that's going to have consequences at the polls. And kind of on that note, Democratic senators Jack Reed and LaFonsea Butler have written to Gary Gensler to urge the SEC not to approve any more crypto ETFs. They wrote that, quote, Retail investors would face enormous risk from ETPs referencing thinly traded cryptocurrencies or cryptocurrencies whose prices are especially susceptible to pump and dump or other fraudulent schemes.

They warned that accepting other crypto products could set a precedent for further approvals on smaller crypto assets, noting, however vulnerable Bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct. One of the senators' main gripes is that many of the Bitcoin funds are commonly being referred to as ETFs, when they should be referred to as exchange-traded products or ETPs. There's a difference in the legislation that authorizes the two different types of funds. The senators listed a range of missing investor protections including a fiduciary duty, limits on leverage, custody requirements, corporate governance requirements,

prohibitions on conflicted practices, restrictions on fees and expenses, and examination by the SEC. It is unclear to me whether the senators are actually suggesting that some of the largest asset managers in history are likely to operate in this manner. The senators urged the SEC to three major steps. scrutinize brokers and advisors' communication regarding Bitcoin ETPs, examine brokers and advisors that recommend cryptocurrency ETPs to ensure they are acting in the best interests of their clients, ensure that Bitcoin ETPs do not use inappropriate and confusing naming conventions in SEC filings and other investor documents.

The letter concluded by stating, We do not believe that markets for futures on other cryptocurrencies are likely to demonstrate the tight correlation with spot markets that would enable meaningful market surveillance to deter and detect bad actors. As Alexander Greve of Paradigm writes, the success of the Bitcoin spot products clearly ruffled some feathers on the hill. And that, friends, is where we will leave this for today. One more big thank you to my sponsors for today's show.

Go to crackin.com and see what crypto can be, and check out Ledger and especially the Ledger Bitcoin Nano, where 5% of sales will go to support Bitcoin development. Until next time, be safe and take care of each other. Peace.