Bitcoin prices could soon potentially face renewed volatility. This comes as Craig Wright has been ordered to pay around 500,000 BTC to the brother of David Kleiman. However, Wright now claims that this will only lead to a massive sell-off of Bitcoin.

Wright will cede 50% of the Bitcoin mined together with Kleiman

The controversial legal battle surrounding Craig Wright and the estate of Wright’s late former partner, David Kleiman, recently reached an end. According to a court audience member, August 26th saw Judge Bruce Reinhart formally reject Wright’s testimony.

Moreover, Reinhart said that Wright had also perjured himself through giving the court falsified documents. Following this, Judge Reinhart went on to recommend that Wright would give 50% of the more than one million Bitcoin mined together with Kleiman to the Kleiman estate.

Following this ruling, however, some immediately began to speculate that this might lead one actor to dump large quantities of Bitcoin. Several commentators noted this would have adverse short-term effect on the price of Bitcoin. However, others said a sell-off could also “disburse Bitcoin more evenly” instead of having coins in the hands of one single holder.

Nevertheless, this now appears to be the only way forward for the Kleiman estate. In a recent interview with Modern Consensus, Wright said he will comply with the court order. As such, the Kleiman estate will seemingly receive over 500,000 Bitcoin.

The Kleiman estate could need to sell $2 billion Bitcoin to clear estate tax bill

Moreover, this payment – which would be worth more than $5 billion – could attract an estate tax rate of 40%. As such, the Kleiman estate will need to generate the roughly $2 billion needed to settle the estate tax bill.

This has led some crypto news outlets to state that the “Kleiman estate will now dump $2 billion in Bitcoin”. Although this is not yet entirely certain, it appears quite likely if the payout will be subject to the estate tax.

If the estate tax is not paid using the Bitcoin funds, it’s unclear where the substantial capital would come from. However, liquidating roughly 200,000 Bitcoin would likely send the price of Bitcoin crashing.

As such, it will be most interesting to watch how this story continues to unfold in the coming weeks. This affair will likely be sorted in an orderly fashion, to avoid any unnecessary market disturbance. However, as has been the case with the Wright trial, nothing is entirely certain.