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Attorney for Bitcoin asserts that Craig Wright’s legal action may negatively impact open-source software.
Jessica Jonas, the chief legal officer of the nonprofit Bitcoin Legal Defense Fund, addressed the possible legal consequences of a prominent lawsuit against Bitcoin core developers during the Bitcoin 2023 event held in Miami on May 18.
The lawsuit in question is a legal action from the UK initiated by Craig Wright, the owner/operator of Tulip Trading. Wright is perhaps best recognized for his claim of being the Bitcoin creator Satoshi Nakamoto — a statement that is also the basis for another unrelated lawsuit.
I would just want to say a quick reminder for BTC Core and Roger Inc.
You are under litigation hold. Those telegram groups, the signal groups, the others that you think I don’t know about are all discoverable evidence and spoliation is a criminal offence. pic.twitter.com/vtjFmeGrRd— Dr Craig S Wright (@Dr_CSWright) February 3, 2023
In the dispute involving Tulip Trading and 14 identified individuals purportedly engaged in the open-source development of Bitcoin Core, among others, Wright claims that these developers owe him a fiduciary duty. Jonas characterized the case as centering on “an allegation that Tulip Trading owned, allegedly, 111,000 Bitcoin and was hacked, allegedly, and lost that 111,000 Bitcoin in some very Ocean’s 11 style hack.”
To seek restitution for the purported loss, Wright is insisting, according to Jonas, that Bitcoin developers “create a backdoor into the Bitcoin core blockchain so that Tulip Trading can recover the funds it allegedly lost,” a solution Jonas contends is unfeasible:
“They are asking the court to order that this group of software developers write a patch into the software that diverts funds. That’s not how Bitcoin works. It’s impossible.”
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Jonas clarified that enacting such a modification would necessitate hard forking the Bitcoin blockchain and then relying on everyone globally to transition to the new fork rather than continuing to utilize the existing core chain. She described the legal domain surrounding fiduciary duty as “complicated” and further elaborated that the lawsuit poses significant risks beyond mere technical challenges.
“This case has actually already gone through an appeal and the appellate court found that the question of whether open source developers should owe a fiduciary duty to people who use their code is an important one,” asserted Jonas. Additionally, she characterized the potential risk to the open source community as “existential.” “Open source software makes up 97% of the world’s software,” she noted.
Related: 7 people who could be (or not) Bitcoin creator Satoshi Nakamoto
Jonas also positioned the case as a matter of free speech. Although many of the defendants named in the lawsuit are U.S. citizens operating within the U.S., the case is being adjudicated in the UK due to the appellate court’s determination that it held jurisdiction based on the potential public interest outcome in that country.
According to Jonas, software development is regarded as free speech in the U.S., and in her view, “Tulip Trading is acting in a UK court in a civil action to compel many Americans to speak.” While the UK court may not be able to enforce U.S. free speech laws, Jonas countered the notion that it would be unreasonable for the court to rule in favor of Wright.
Bitcoin open source development operates under MIT’s open source license. Given that open-source software is generally accessible to anyone, anywhere, imposing fiduciary duty on developers could create a scenario where an individual in one country is held liable for damages to someone in another simply due to their contributions to an open source project. Current legislation, as explained by Jonas, is designed to shield open source developers from lawsuits initiated by unrelated parties:
“They are volunteering their time to work on public infrastructure. They’re doing it for free. They’re doing it under MIT license, which is supposed to protect them from things like this.”
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