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A con artist has filed multiple lawsuits in the UK against the current and former (increasingly, as more quit) developers of Bitcoin demanding billions of dollars, part in retaliation for their failure to back up his obviously false claims of being Bitcoin's creator and in part as part of an insane plot to steal billions of dollars in Bitcoin. Unfortunately, his efforts are financed by at least one (and possibly multiple) persons with far more wealth than morals who have been promised a share of the spoils.

The poster of the linked article, Wladimir Van der Laan, was one of the most active developers of Bitcoin since 2011. I'm also another early bitcoin developer, now former, and another one of this conman's legal attack targets.

A key point about vexatious litigation, especially in places like the UK which lack protections against SLAPPs, is that the attacker doesn't need to win the lawsuit to achieve his goals: He can cause his victims millions of dollars in legal costs, phenomenal impositions on their time and privacy, and great psychological stress-- losing nothing himself but what he paid for his attorneys. Winning or not is more or less incidental, as the culprit here said quite explicitly online before commencing his lawsuits (saying that the intent was to destroy his targets and their families financially and psychologically). That fact that none of us were in the UK or had any dealings in the UK doesn't matter because open source software is available everywhere.

For that reason its important that it be possible to discharge frivolous litigation as quickly and efficiently as possible. As open source developers the cost/benefit of publishing our work can be pretty dicey to begin with, so it's important that the licenses we use not gratuitously open up avenues for litigation from the users since there are no revenues to pay for such things as a cost of doing business.

In his first lawsuit, he alleged to own billions of dollars in Bitcoin (coins which are already well known to have belonged to the MTGox exchange) and that in 2020-- coincidentally just as his obligations to repay his lenders were coming due-- thieves entered into his home to install a "wifi pineapple" to hack his computers and steal the keys and that when he discovered this "hack" he wipes his computers to clear the compromise, conveniently making sure there would be no evidence of the "hack" or ever owning the coins to begin with. The coins in question have not moved. He then filed a lawsuit against a dozen former and current developers arguing that as developers they have a fiduciary responsibility to introduce a backdoor into the bitcoin cryptosystem to "recover" "his" coins. In three years there has been no comment or apparent action by the police over this theft which, if it were real, would likely be the highest value heist in recorded history.

The case seemed obviously baseless to us, owing to obvious falsehood of his claims, the impossibility of his request (people would not adopt this backdoored version, even if anyone was willing to make themself complicit in his attempted theft by writing it for him), the pointlessness of it (he just pay someone to write it (or do it himself, if he could program) and half the defendants had long since stopped working on Bitcoin), the fact that even the police don't have a positive duty to save anyone from harm, and the unambiguous disclaimer of liabilities in our software license -- without which we never would have published it in the first place.

And keep in mind that he's already been found by judges in several countries to have perjured himself, submitted faked evidence, etc. in other cases (as shown in this collage of rulings against Wright, https://pbs.twimg.com/media/FoMUonbXkAEbJbL?format=jpg&name=... )

The trial court agreed ( https://www.bailii.org/ew/cases/EWHC/Ch/2022/667.html ), ruling that his case didn't have more than a fanciful chance of success. But he appealed and the decision was reversed ( https://nt4tn.net/scammer-craig-wright/Tulip_v_Van_Der_Laan_... ). He's now gloating on slack and twitter that he's already "won" because we'll be 'ruined' by having to pay the 7-figure cost of his successful appeal and by publishing whatever dirt he can extract from our private data obtained in discovery.

(The second lawsuit, which has yet to come before a court alleges that the targets are violating "his" copyright by distributing the Bitcoin "block format" and bitcoin documentation, nevermind the fact that Bitcoin has been released under the MIT expat license since day one, and that this bozo's claims of being Bitcoin's creator are totally discredited and obviously false. He's also filed additional lawsuits against community members and journalists for expressing the view that his claims of having created Bitcoin are false).

Regardless of what you think about Bitcoin, the enforceability of the disclaimer of liability is critical to all of open source and the court's unwillingness to summarily dismiss an effort to compel the authorship and publication of a backdoor in a cryptographic security scheme from a supposed user who hopes to benefit from the backdoor should be a concern to all open source developers.




This is insane. The UK seems completely unequipped for a bad faith actor of this magnitude. I'm a huge cryptoskeptic, but what this guy is doing is straight up evil. I hope you and everyone else come out relatively unscathed, and I'm sorry you've got to deal with this loon.


Is there an organization covering the legal defense fund of these devs, or a crowdfund effort that you know of? Supporters of cryptoassets or not, I think we can all identify with this being a big problem that can bite us, as developers of free software, in other ways if we don't make a stand here with a case as visible as this. This is a dangerous precedent.


We're currently being supported by a recently created defense fund: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022...

So far we've been able to keep our costs fairly modest, but as the case (now cases) go to trial the costs will likely balloon rapidly.

It's always a concern though because support might stop at some point, especially since the total cost is more or less unbounded. For example, in the defamation lawsuit against Peter McCormack his sponsored pulled out after the funds expended crossed a million UKP sticking Peter in the middle of some complex and expensive litigation and forced to withdraw most of his defenses because he couldn't afford the cost of them.

Fortunately, at the 11th hour he was able to prove that the claimed damages the case rested on were totally fabricated (the plaintiff claimed to have been dis-invited from academic conferences; McCormack got a statement for the organizers that Wright's submissions were rejected by peer review for being rubbish), resulting in McCormack ending up with a 1 UKP judgement against him ... plus some 900k UKP in legal costs (which he's currently fighting to get dismissed).

A challenge future fundraising may face is that the time-scales of court are not compatible with the attention span of the public-- the number one thing I hear when I have updates is "oh, is that still going on?". The second most common is "that guys a joke-- just ignore him, he only wants attention". Well, I wouldn't argue that he's not a joke, but even a joke can cause tremendous damage especially when everyone's reaction is to ignore it.

The opensats fundraiser was able to raise about $1.5 million dollars for hodlnaut's defense, which on one hand is a tremendous success--- but on the other hand is about an order of magnitude too low. Which is why I'm attributing problems here to the legal system and inadequate protections of open source licenses in light of them (MIT's waver of liability is arguably stronger than most too) rather than saying the community hasn't stepped up in support.


These high costs are because of money spent on defence lawyers? Fascinating. I suppose one wouldn't risk any but the most expensive lawyers lest one end up losing to this guy.


Yeah, sometimes people say "You're in the US, why don't you ignore it until they try to enforce it here?" -- and the answer is that sure you'd fight any enforcement in the US but you only have a limited set of chances to kill the case, and if you miss them they're gone. You absolutely will lose in court if you present an inadequate defense.

What a shame it would be to lose a transparently baseless case through mismanagement. Ironically, it's the strong cases that you're almost sure to lose that you might as well phone in or not defend at all.

In this case the plaintiff does everything he can to jack up the costs, including bombing the case with irrelevant stuff, gaslighting, etc. The courts have caught him doing this in other cases and chasized him in their rulings (complaining for forgeries and perjury) but the recourse so far has been confined to wrist-slap grade consequences.

A lot of the structure we have in our courts (both in the US and UK) to ensure good faith behavior is setting things up so that cheating makes you ultimately lose the case. But if you didn't seriously expect to win on the merits (instead only by the other side screwing up) and were mostly just trying to use the process to cause harm then it doesn't really matter if your forgeries and perjury ultimately cause you to lose.


This is honestly such a horrible abuse of the system. Too much of what we have is predicated on not preventing the Eye of Sauron from falling on you. Sorry to hear about your unfair troubles.


Little words of support mean more than you might guess-- being the target of this stuff is inherently rather isolating. Thanks.


He is plainly a vexatious litigant. Can you get him declared as one? It's a very high bar though and I've no idea what the process is.


In the UK one must lose multiple cases under the same subject matter. He uses shell companies to bring the cases and brings them under wildly varying subject matter. It's pretext, but until it's attempted it'll be unclear if it'll be possible to get the court to see through the pretext.


I thought in the UK loser pays


Kinda. Generally 70% would be paid by the loser, and it works more or less motion by motion.

So for example, in Wright v McCormack, McCormack was able to show at trial that Wright's claims of damages were intentionally falsified. This got McCormack a 'loss' where he only had to pay 1 pound and where he was awarded his fees for the trial (well probably 70%, that hasn't been decided yet)-- but in the interest of finality the trial court declined to reverse the 900k pounds in fees he had to pay for the other sides costs in earlier motions.

This also potentially provides an additional avenue to hit your opponents during a SLAPP-- sandbag your costs so that whatever the opposition does have to pay on motions they lose are ruinous, and also so they have to spend a lot defending themselves so that 30% they can't recover is also ruinous.

Full cost on trial like this-- with discovery and experts, etc-- may be on the order of 10 to 20 million pounds. Would you expect a volunteer open source developer to be able to pay a non-negligible part of that, on top of the substantial imposition on their life and time that fighting the case and winning entails?


> UKP

I presume you are referring to https://wikipedia.org/wiki/Pound_sterling ? If you are doing it because of political beliefs, perhaps avoid that on HN, and should maybe using the £ symbol would be a suitable compromise instead? Although maybe it was just a typo, given you used “dollars” later to refer to USD


I had absolutely zero idea that there was any political baggage in using that string. Care you make a suggestion that doesn't involve a key I don't have on my keyboard?


The ISO currency code is GBP. I can't imagine using that being a political statement.

(And I'd never heard of anyone calling it UKP as a political statement, but presumably it would have something to do with Northern Ireland being a part of UK but not part of Great Britain.)


you got all that from what he said? I read it as "UK Pound" and just assumed it was a uk vs eu thing that changed.


I'll avoid it in the future, 'pounds' is just confusing by itself to us Americans because its a common unit of weight. "He owes 100 pounds" "pounds of what? flesh?"


I’m very sorry: I read far too much into a simple typo, and I jumped to an ill-thought-out conclusion in my confusion. My apologies.


It's all good, we know you meant well, no harm no foul. Have a good night :)



How are they going to seek the damages given the defendants probably don't own any property in the UK?


I don't believe they have any serious belief that they'll win. Their cases are just too factually deficient. Rather, I believe their hope is to ruin the defendants financially and force them into default. And, even failing that-- create a chilling effect to silence anyone who might otherwise be critical of their crooked schemes.

That said, other countries will frequently enforce foreign judgements. In this case, the specific performance they're asking for would likely be unenforceable in the US (and useless regardless) -- but damages might well be enforceable.


(IANAL)

The most horrible part is that _they are allowed to drop their case anytime_ in the UK civil court. In previous cases when the accused has run out of money, the defendants have to pay their costs [1] to keep the trial running - with zero chance of being able to recoup costs because the accused will be bankrupt anyway. The UK state should not make private individuals fund the creation of novel case law; it's absolutely stupid.

[1] https://www.dpsa.uk/wp-content/uploads/2021/11/Malkiewicz-v-...


> The UK state should not make private individuals fund the creation of novel case law;

If you read the appeals decision (and the decision that granted the permission to appeal)-- that seems to very much be the motivation here too: Case law on this subject would be intellectually interesting and potentially important in the future, so lets leave these foreign defendants on the hook to help establish it.

Beyond the ethical problems with that position to begin with, this is a terrible case to try to establish anything because it's so factually conflated that all the resources are going to go to sorting through the plaintiffs lies. The defendants don't have any particular interest in the UK establishing good law except to the extent that bad law in the UK may have international ramifications. (and even there not much-- defendants aren't businesses, they're volunteer developers many (most?) of whom have already quit participating)


Might be enforceable? I'm guessing there are some nuances here and I'm curious about them as my fast take on the situation would be to ignore it as unenforceable (if not living in the UK).


The problem with ignoring it is that if you later learn you were wrong about the degree of enforcability you can't go back and challenge the decision. Obviously the US defendants would challenge any enforcability and expect to win, ... that said we also expected to be able to get it summarily dismissed.


I don't think they expect to do they? They are just using an unlimited bankroll to punish people they perceive as their enemies with hugely expensive and stressful litigation.


>They are just using an unlimited bankroll to punish people they perceive as their enemies with hugely expensive and stressful litigation.

To extend the parent question, why can't the people accused, not being in the UK, simply ignore this?


Because generally UK judgements can be enforced in the US (and other places).

There are good reasons to expect that in this case they would be unenforceable in the US, but that isn't a guarantee-- and if they are you don't get to go back and fight the cause you lost by default and would have expected to win on the merits. So you're risking a kafkaesque situation where everyone is saying "yep, it's wrong and unfair, now hand over all your assets. thems the rules".

It's also the case that ignoring a judgement in the UK can get you found in contempt and subject to prison should you happen to find yourself (perhaps accidentally) in the UK in the future. Personally I have no problem never going anywhere near the UK in the future, and though "outlaw in the UK" has a nice ring to it, this does add to the incentives.

The person who runs the bitcoin website was sued by the same con for distributing the bitcoin whitepaper, and defaulted because the UK wouldn't allow him to defend himself without divulging his identity. He took the whitepaper down from the UK under threat of arrest (if they ever find him) and now facing hundreds of thousands of pounds of the opposing side's legal fees under threat of potentially losing the domain name (and/or prison, again if they can find him). There really is no silver bullet.


Default judgements can be the basis of internationally-targetted lawsuits aimed at enforcement of same; they can form the basis of arrest warrants, which implies never travelling to places where the UK can send police officers to arrest you, and while it would likely be an amusing basis for someone to start turning e.g. Linux into fiduciary liability for the purpose of legal trolling, who wants to facilitate that?!




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