Craig Wright sued Bitcoin podcaster Peter McCormack for calling him a “fraud” on his Twitter. McCormack’s lawyers responded on 9 August — and it’s blistering.

Wright put in his claim on 17 April 2019, listing dates and times of several tweets. He filed the particulars of his claim on 1 May. Wright maintains that McCormack calling Wright a “fraud” is not merely defamatory — but seriously injurious to his reputation.

In fact, Wright claims that McCormack merely having said “Craig Wright is not Satoshi” (Nakamoto, the inventor of Bitcoin) in two tweets is seriously injurious defamation, by innuendo.

McCormack holds otherwise.

McCormack’s defence

McCormack’s defence is a wonderful legal document, which you will enjoy reading. McCormack will be making Wright set out his claim properly, and show all his working.

McCormack wrote and posted the words in the tweets — but says that they have been selectively quoted, and will be defended in the full context of the Calvin Ayre tweets that they are in response to.

Wright was already widely known to have failed to prove he was Satoshi — and this would be well known amongst McCormack’s readership, of “persons with a special interest in and knowledge of bitcoin and cryptocurrency.”

In paragraph 19, McCormack points out that Wright has no good reputation — he is most famous worldwide for spectacularly failing to prove he was Satoshi, after presenting a faked cryptographic signature and then failing to move Satoshi coins:

In other words, the allegation — and its basis in the Claimant’s failed promises to prove he was Satoshi Nakamoto — was notorious and had been the subject since May 2016 of continuous widespread global publication within the bitcoin and cryptocurrency sector and in mainstream media, and had thereby become an inherent part of the Claimant’s global public reputation. … In all these circumstances, for the claim to be actionable the Claimant would have to prove: (a) that he suffered or is likely to suffer serious harm to his reputation in this jurisdiction as a matter of actual provable fact, (b) that it was the actual impact of the Defendant’s ten Tweets on those to whom the words were published in this jurisdiction specifically which caused that effect, and (c) that it was not caused by the Claimant’s notorious failure to prove that he was Satoshi in May 2016, notwithstanding his own promises to do so, and/or published accounts of and/or commentary on that failure, and/or any or a combination of the mass of other publications as aforesaid, including those outside this jurisdiction.

Paragraph 20 calls Wright’s claim an abuse of process, quoting Calvin Ayre’s own words — “judge only needs one troll to pass judgement … no need to sue everyone … just waiting for a volunteer to bankrupt themselves trying to prove a negative and then letting Craig show the proof”.

If Wright is already in a position to prove himself Satoshi, then McCormack says there’s no reason not to do so now — rather than provide proof only after spending considerable court time and resources.

McCormack finishes by asserting that, in any case, everything he was quoted as saying was true, pursuant to section 2(1) of the Defamation Act 2013 — “the Claimant’s claim to be Satoshi Nakamoto (the pseudonymous person or one of the group of people who created bitcoin) was fraudulent, in that it was a lie, as demonstrated by his own failed promises to provide cryptographic proof of that claim.” He maintains his statements are in the public interest, pursuant to section 4.

The rest of the defence is a statement of facts — important parts of which concern the history of Wright’s claims to be Satoshi, and the marketing of those claims by Ayre’s companies.

Also mentioned is the Florida case brought by the estate of Dave Kleiman — and Wright’s statements under oath in that case, which contradict his public claims in May 2016: “The Claimant could not have transferred the bitcoin in May 2016, as promised, if he in fact did not have the public or private keys, as he now claims in the Florida Proceedings.”

Legal Notice and Next Steps

We also have the nice cover letter from McCormack’s lawyers to Wright’s lawyers.

This goes in hard on Wright — listing every necessary detail the claim and the particulars of claim have failed to state.

Following the decision of the Supreme Court in Lachaux (which we note post-dates the Particulars of Claim), your client must establish serious harm as actual provable fact; not merely as an inference from the words complained of (which is how it has been pleaded in the Particulars of Claim but which we consider unsustainable in this case anyway, as explained in the Defence).

Lachaux v Independent Print Ltd [2019] 3 WLR 18 was decided by the Supreme Court on 12 June 2019. It rests on interpretation of the Defamation Act 2013. The court held that the words “serious harm” in section 1 of the Defamation Act 2013 mean that serious harm needs to be shown by the claimant — it can’t just be presumed. Mathilde Groppo of Carter Ruck summarised the impact of that decision at the time — she considers that the Supreme Court has, effectively, “abolished the common law presumption of damages for libel.”

McCormack’s defence leans heavily on Lachaux. He requests the details of precisely how his words damaged Wright’s reputation, setting out the alleged serious harm caused by each of the ten cited statements — and enumerating all EU countries in which Wright has suffered “damage to his reputation.” He wants “the actual impact” his words are claimed to have had.

McCormack’s lawyer also asks Wright to put up or shut up:

We invite your client to provide to our client on a voluntary basis the “proof” that he is Satoshi Nakamoto, which he and Calvin Ayre, on his behalf, have indicated that they possess and will produce in these proceedings. We refer you to paragraph 20 of the Defence. Our client is prepared to walk away from these proceedings without any contribution to his costs incurred so far if your client provides satisfactory and independently verifiable proof that he is Satoshi. Our client would also in that event be prepared to make a public statement withdrawing the allegation that your client’s claim to be Satoshi is fraudulent. This is, after all, what your client has been publicly promising and conspicuously failing to do since May 2016. It is correspondingly what our client, along with a great many other commentators, have been inviting him to do.

Can hardly say fairer than that! And they really want that proof:

Should your client decline, once again, to come good on his promise by providing the requested proof within 21 days, he will need to give a very convincing explanation as to (a) why he declines to do so and (b) exactly when he intends or expects to provide the proof. Subject to the adequacy of that explanation, our client reserves the right to apply to court early next term for a direction that your client provide the “proof” promised in Mr Ayre’s 16 April 2019 tweet and, that if he does not do so, that the claim be struck out or stayed.

The lawyer also questions just how connected to England Wright is, including:

Has your client taken any steps which would prevent our client enforcing an adverse costs order, by your client’s use of trusts or by acquiring diplomatic status like Calvin Ayre claims to have in Antigua?

McCormack’s lawyers have asked for a response by 29 August.

See also Decrypt’s summary. (Ben Munster put up all the McCormack court documents. Cheers!)