"Claimed" Satoshi Nakamoto Files a Lawsuit Against Coinbase and Kraken

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May. 5 2022, Published 12:57 p.m. ET

Craig Wright, the man who claims to be the Bitcoin blockchain and cryptocurrency creator Satoshi Nakamoto, has a bone to pick with major crypto exchanges. Wright is suing Coinbase and Kraken over what he calls “fake bitcoin.”

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Here’s the rundown of the Nakamoto lawsuit and whether Wright could hold weight against major exchanges in the court of law.

Self-proclaimed Bitcoin creator Craig Wright is suing Coinbase and Kraken.

Since its founding in 2009, Bitcoin’s origin story has largely remained a mystery. The creator, who goes by the alias Nakamoto, hasn't been confirmed, juxtaposing the transparency that makes up the blockchain ideal.

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Wright, an Australian computer scientist, claims to be Nakamoto. Wright has worked for major organizations from K-Mart to the Australian Securities Exchange. He has a freckled history, including a 2004 charge of contempt of court and a 2015 report from Wired suggesting his claim to Bitcoin fame was nothing but a hoax.

Still, Wright is holding firm to his convictions, going so far as to sue Coinbase and Kraken. According to Wright’s legal firm Ontier, the lawsuit alleges that the two crypto exchanges are “misrepresenting that the digital asset ‘Bitcoin Core’ (BTC) is Bitcoin.”

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What is Nakamoto claiming in the lawsuit?

According to Ontier, Wright claims that “these exchanges, and others, have been trading — and encouraging investors and consumers to trade and invest — in BTC, by passing off that asset as Bitcoin, despite it only having been created in 2017 as a software implementation which is different from and separate to the Bitcoin protocol which Dr. Wright fixed when he first created the electronic cash system more than 13 years ago.”

The lawsuit says the only true Bitcoin cryptocurrency is something called Bitcoin Satoshi Vision (BSV). BSV is a hard fork of a hard fork of the original Bitcoin protocol (yes, a fork of a fork).

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Wright says about his intent in the case, “I want to correct the deception that consumers are being subjected to, using the appropriate legal channels and require those operating exchanges to stop passing off BTC as Bitcoin, to change the name, to be clear in their communications and to list BSV which is Bitcoin.”

Does Craig Wright’s lawsuit hold merit?

The lawsuit states that Wright is, in fact, the original Bitcoin creator Nakamoto. Proving that will be his first hurdle, and it may be impossible. Secondly, he’ll have to prove that BSV is the new true migration.

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Coinbase is a publicly traded company in the U.S. listed on the Nasdaq Exchange. As such, Coinbase is subject to more intense disclosure and regulatory scrutiny. Kraken is in talks to go public itself, which puts it at the same threshold.

If Wright were to succeed in his case as Nakamoto against Coinbase and Kraken, it would likely be the result of a collection of lawsuits from various parties claiming similar behavior by the crypto exchanges. On his own, proof could be difficult to come by.

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