Self-Proclaimed Bitcoin Creator Says His Near $8 Billion in BTC Fortune May Remain Locked

Francisco Memoria

Self-proclaimed Satoshi Nakamoto Craig Wright, who was ordered by a judge to surrender half of his near $8 billion in bitcoin fortune to the estate of his former business partner Dave Kleiman, has revealed the fortune may not be unlocked in early 2020.

According to Bloomberg News, Wright issued a statement saying he “cannot be certain that information will in fact arrive” to help identify the BTC in the Tulip Trust, which is said to have over 1.1 million BTC in it. An event in which Wright received access to those coins on January 1, 2020 is expected, but the Australian scientist noted he didn’t say the private keys to access the BTC would become available then.

Earlier this year, U.S. Magistrate Judge Bruce Reinhart has said he believes Wright submitted false documents and lied in the legal dispute and ruled the late Dave Kleiman was to received half of all the BTC Wright mined through 2013, and half of the intellectual property he created.

In court he has also said that the trigger event won’t actually give him the keys to access the locked BTC, but rather control of an encrypted file, whose keys are distributed among trust participation “using a version of Shamir’s Secret Sharing algorithm.”

Judge Reinhart found “clear and convincing evidence” said file doesn’t actually exist, and that Wright’s testimony was “intentionally false,” according to those representing the Kleiman estate.

Wright is a controversial figure in the space as he hasn’t been able to prove to the public he is indeed Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Some believe the Tulip Trust itself doesn’t exist, and he will never have access to the 1.1 million bitcoin. Others are worried it does exist, and that he will dump the BTC as soon as he has access to it, potentially crashing its price. Wright is a well-known BSV supporter.

In the statement, while referring to the fortune, he said:

I do not intend to dump my family’s BTC as some people suspect or want, as this would hurt many people in the industry.

Does the Tulip Trust Exist?

Some have pointed out there are no blockchain records showing that a trust with 1.1 million BTC was created in Bitcoin’s early days. Its proponents, however, point out Wright has claimed to use Bitcoin’s nLockTime function, along with smart contract scripts, to create the trust.

Bitcoin’s nLockTime function would allow a transaction to only be accepted in a block at a specific time, while taking away access to the funds in a wallet until said time has passed. This means it’s entirely possible dormant bitcoin wallets may in the future move funds to form the Tulip Trust.

Those who support Wright even point to a patent application filed by nChain Holdings last year, which he created, that concerns using nLockTime to perform such an operation on an unspent blockchain transaction output.

That being said it’s unclear whether the Tulip Trust exists. There are no records on Bitcoin’s public blockchain showing it was created – or at least no transactions have been associated with its creation – but its proponents argue the funds within it are locked in, waiting for a trigger event.

Featured image by Aleksi Räisä on Unsplash

'Big Spender' Bitcoin Wallet Exploit Is an 'Issue With BTC Itself', Says BCH Supporter

Michael LaVere
  • Crypto security firm ZenGo has identified a double-spend exploit dubbed "BigSpender" which affected popular bitcoin wallets.
  • Exploit allows an attacker to cancel a bitcoin transaction without the receiving user knowing. 

A crypto security firm has identified a double-spend exploit targeting popular bitcoin wallet providers. 

According to a report by ZenGo, the security firm has discovered a double and multiple spend wallet exploit for bitcoin dubbed “BigSpender.” The report claims the exploit allows an attacker to cancel a bitcoin transaction but still have it appear in a victim’s vulnerable wallet. 

The report reads, 

The core issue at the heart of the BigSpender vulnerability is that vulnerable wallets are not prepared for the option that a transaction might be canceled and implicitly assume it will get confirmed eventually.

As CryptoGlobe reported, ZenGo found that a user’s balance would be increased following an unconfirmed incoming transaction, without a subsequent decrease in the event the transaction being double-spent. The firm outlined how an attacker could use the exploit to cancel transactions of sent bitcoin while still receiving goods and services in return. 

The security firm tested nine popular cryptocurrency wallets and found BRD, Ledger Live and Edge to be vulnerable to the exploit. All three companies were notified by ZenGo of the threat and subsequently updated their products. However, the firm noted that “millions” of crypto users may have been exposed to the attack prior to the update. 

Bitcoin Cash supporter Hayden Otto told Cointelegraph the exploit is particularly concerning for bitcoin-accepting merchants. 

He said, 

The technique is facilitated by RBF (replace by fee), a so-called ‘feature’ added at the protocol level by the Bitcoin Core developers.The issue exists if you use BTC. Wallet software can only make some trade off, which results in a worse BTC user experience, in order to try to protect BTC users.

Otto claimed the exploit was derived from “an issue with BTC itself” and had little to do with wallet software. 

Featured Image Credit: Photo via Pixabay.com