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Why It’s important To Support Hodlonaut On His Legal Stand Against Craig Wright

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This article is based on a comment by Greg Maxwell on Reddit. If you are looking to support Hodlonaut directly you can visit the donation page, where over 50 BTC as already been raised to support Hodlonaut.

It would be difficult to overstate how important this is to Bitcoin, yet it’s often underestimated because the situation is so bizarre that if it were a novel it would get panned for being too unbelievable.

A conman who can’t even program and muddles even the basics of Bitcoin tech started claiming he created Bitcoin to try to get out of trouble after he engaged in long-running multi-million dollar tax fraud, which so far ended in a police raid on his home and office where he successfully evaded the police and fled the country.

On several occasions he’s claimed he would provide “proof” of his claims, but the proof he provides just gets proved to be forgeries. At one juncture he was ordered to provide a list of specific Bitcoin that he owns to a court and when it was made public parties controlling thousands of Bitcoin from his list immediately showed up signing messages calling him a fraud. Even his mother called out his pathological lying.

You’d think that would be the end of it— but no, the tax fraud set off an improbable series of forced moves as he then needed to repay the tax authority to get them off his trail so in order to get millions of dollars in loans he claimed that he had possession of 1.1 million bitcoin locked in a trust controlled by a “bonded courier” that would release them to him on a particular date (think of that scene at the end of “Back to the Future 2”). Unfortunately, there are plenty of technically unsophisticated but wealthy people out there who can be tricked into ignoring even the most conclusive technical evidence of fraud.

When the bonded courier didn’t show (surprise surprise), Mr. Wright needed a new excuse and started claiming that his coins were stolen in an “Oceans 11” style high-tech break in of his home to plant a “wireless pineapple” to hack his computers. He claims, conveniently, to have erased the computers afterwards so he has no evidence of their theft.

Now you might be thinking– all this sounds tragic for his victims and their families but why should it concern me? And indeed, for a long time it didn’t and so almost anyone of any competence just ignored him. Unfortunately, this gave him significant control of the media narrative through constant events, press releases, and bought-and-paid-for outlets. To really lock it in he began filing lawsuits against journalists and community members that countered his facially false claims chilling criticism. The world has been split into two groups: ones that don’t know any better and will repeat his claims with minimal skepticism, and people who know that they don’t want to go anywhere near it. As a result the first group sets the public narrative.

With so much coverage treating him seriously (often saying, at most, that his claims are “disputed by some” rather than laughable and thoroughly disproven) and tens of millions in funding from his victims– allowing him to essentially monopolize a whole law firm– the courts have taken him seriously too. So although his court cases are laughable and doomed, he’s able to inflict millions of dollars in legal fees on his victims even when they ultimately win, and in some cases damaging them financially so thoroughly that they’re unable to effectively fight back. He’s been directing these lawsuits at Bitcoin community members, advocates, and journalists, and more recently Bitcoin developers and former developers and exchanges.

His vexatious litigation has made the Bitcoin Whitepaper unavailable to people in the U.K. from the original download site; in fact when you search for it in the U.K. you get a recent forgery by Mr. Wright with his name on it. I once had a rather confused conversation with a journalist that couldn’t understand why anyone would think Wright didn’t creat Bitcoin, finally they said his name was on the whitepaper and I understood what had happened. It’s also caused Bitcoin Core to be unavailable from to anyone in the U.K.

To substantiate his pineapple hack claims he’s filed a lawsuit against a dozen (active and former, but increasingly former) Bitcoin developers demanding they aid him in producing and distributing a version of Bitcoin with a cryptographic backdoor which will allow him to seize those coins he claims to have lost (but obviously never owned) or otherwise pay him billions of dollars in damages. To anyone with expertise in Bitcoin it’s obvious why the demand can’t work: Users simply wouldn’t choose to run such a version and would run alternatives or stay on old versions. But the courts aren’t Bitcoin experts and seem happy to provisionally take Wright’s word for it that it would work and not immediately dismiss the case on the basis of its obvious impossibility.

He’s also supposedly filed a second lawsuit against an overlapping and somewhat larger set of developers for, apparently, failing to do his bidding more generally. That’s not even getting into the substantial amount of harassment and threats (including publishing a statement that he’d shoot us in the back of the head if he could get away with it) outside of the legal system. His actions have contributed to at least four of some of the most prolific and longest-standing developers discontinuing or substantially curtailing their involvement with Bitcoin (and I’m a target of both of these cases).

And of course, Wright and his conspirators actively lobby governments, schmoozing heads of state.

When people talk about Bitcoin being robust and safe from attack this isn’t some magical property that exists in a vacuum– part of what makes it strong is its community. It’s protected because its community follows their self-interest and acts to protect it. Sometimes that protection comes in the form of developers engineering excellent security technology, but sometimes what’s needed is political, public relations, or legal aid. All the amazing technology in the world can’t help if people don’t get access to it, don’t make use of it because they’ve been bamboozled out of it, or have to take unreasonable risks to work to maintain it.

The deck is stacked enormously against Hodlonaut and Wright’s other targets: Wright’s laughable claims across multiple countries should have been possible to discharge in a summary judgment, limiting the legal costs to merely hundreds of thousands instead of millions– but since he has nothing to lose, he’ll tell whatever lies are required to keep the litigation going for as long as possible. And with Wright burying his opponents under hundreds of thousands of documents (a substantial percentage of which are forgeries) he easily can drive trial costs into the millions, or even tens of millions of dollars. It creates a situation where the most rational course of action in court is arguably to just let him win as fast as possible in order to minimize cost, since you’d come out better that way then seeing it through and winning. At best Wright’s targets can hope to minimize the damages they suffer, while Wright and his conspirators expect to profit handsomely from their scheme, justifying extensive spending on lobbying and press manipulation while the opposition has been almost exclusively reactive except for a few community members posting angry tweets.

Wright’s fraud is an attack on Bitcoin. Not a conjectural or hypothetical attack but a real one that has already done significant damage. I’m confident that this is an attack Bitcoin will survive because I’m confident that when people will stand up to fight for it and not wait forever for it to be solved by the invisible hand without realizing that each of us is the invisible hand. Wait for him to go away has been tried and it just allowed the situation to fester.

We’re all extremely fortunate that Hodlonaut has been able to hold out to this point and continue to confront Wright’s fraudulent claims directly rather than taking one of several very understandable alternative path would minimize his cost but leave the fraud substantially unchallenged. It’s an effort that deserves our support.

But helping Hodlonaut continue his fight is merely necessary, it’s not sufficient: It’s unlikely that Wright will be stopped by even a complete victory by Hodlonaut, only slowed by it. At this point it seems likely that the only thing that will trigger the end of it is the start of criminal prosecution. That isn’t a long shot either: Last we heard the Australian criminal case over his tax fraud is still ongoing but prosecutors tend to act slowly; only when they’re absolutely sure of a win and especially absent political pressure or a prospect of funds recovery. But in spite of the vastness of the Bitcoin network, our community doesn’t appear to be that well politically connected. But “not that well” isn’t the same as not at all: There are some of us that know people with the power to do something here or have it themselves. It’s time to start some of those conversations.

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