What Craig Wright’s Non-Payment Saga Means for Bitcoin Markets

November 4, 2019 17:07 UTC
  • Craig Wright has declined to pay Dave Kleiman’s estate a $4.5 billion settlement.
  • The plaintiff and defendant had agreed to enter into a non-binding agreement with the promise that Wright would pay.
  • The U-turn has reset litigation proceedings.

It looks like the Satoshi Nakamoto saga will continue into the next year. According to the latest news, Bitcoin SV founder Craig Wright has declined to pay the Kleiman Estate a 500,000 Bitcoin ($4.5 billion) settlement.

The estate, which is represented by Ira Kleiman on behalf of Dave Kleiman, is reported to have entered into a non-binding agreement with the blockchain scientist in September to settle the case away from the courts. Wright is alleged to have implied that he had the means to pay the sum, but on Oct. 30, he broke the agreement. Craig stated that he lacked the finances to fund the settlement.

According to the court documents, the plaintiff has been forced to restart the litigation process as a result. Dave’s estate currently seeks for the deposition of James Wilson, an Australian who was the CFO at Craig’s companies between 2012 and 2013, when Dave was alive.

Moving forward, James Wilson’s testimony will be consequential in ascertaining the facts behind the ownership of the bitcoin stash that Wright is accused of hoarding.

What This Means for Bitcoin Market

Craig Wright has previously claimed that transferring such an amount of bitcoin to the Kleiman estate will have some devastating repercussions, and one of them is that prices will tank.

In a recent interview with Modern Consensus, Wright explained that Florida laws require that a tax of 40 percent be paid on such assets. Because the Kleiman estate is unlikely to have the $2 billion in cash to pay off the levy, some of the acquired digital assets will have to be sold, and selling off such a substantial amount of bitcoin is going to saturate the market and cause prices to fall.

It is worth noting that bitcoin markets are highly volatile and susceptible to manipulation, but hard figures indicating how much BTC is needed to manipulate markets are hard to come by. Some estimates claim that at least $30 million in bitcoins is needed.

If it’s of any consolation, Wright has already said that he has no intention to manipulate bitcoin markets. Away from tales of doom and gloom, there are two possible outcomes if the Kleiman estate is handed the bitcoin and forced to pay tax.

Markets will generally remain unaffected if the BTC sale is carried out via OTC trading desks. Such platforms enable individual buyers and sellers to bypass crypto exchanges when buying or selling vast quantities of bitcoin and subsequently avoid moving markets.

On the other hand, if the estate decides to dump the amount in exchanges, a significant price drop will occur.

This article was edited by Gerelyn Terzo.

@Spence9022

Sam Spencer is a tech, sports, and political news writer at CCN Markets. He also dabbles in cryptocurrencies, and has worked as a crypto investment analyst for over a year now. You can connect with him on Twitter at @Spence9022 and via email samspencer899@gmail.com.