Craig Wright Claims That Law Is Coming For Bitcoin
Craig Wright who claims to be Satoshi Nakamoto states that the law is coming for Bitcoin this year. In his personal blog he presented a view on Bitcoin’s future which does not look too appealing for operators of Bitcoin’s Lightning Network, or the coin’s miners.
One of Bitcoin’s biggest advantages is its supposedly permissionless, authority-resistant essence. But Wright says that these are illusions.
Wright asserts that any amount of Bitcoin bought without complying with legally recognized CDD (customer due diligence) and KYC (know your customer) requirements, is, in fact, stolen Bitcoin:
“Lightning is about creating a system that is not built on individual tokens, but rather balances, because they are treated very differently under law. Yet, the Lightning Network cannot work without Bitcoin tokens as the initial seed base. Here lies the greatest flaw of the system.”
Wright states that the Lightning Network’s system of symbols and balances is unable to protect it from legal investigation and enforcement:
“If stolen bitcoin are passed into a Lightning channel, the purchaser in the Lightning channel does not gain good title. Equivalently, the civil rule of nemo plus iuris ad alium transferre potest quam ipse habet, or, ‘one cannot transfer to another more rights than he has’, means that it does not matter whether you send bitcoin to a Lightning channel; if the bitcoin are stolen, they cannot be transferred.”
Wright also refers to the legal principle of Nemo dat quod non habet — or, “no one can give what they don’t have.” If the legal rights to the “stolen” coins are not transferred in a legal way, then, according to Wright, this would subject the Lightning Network to the threat of a court-sanctioned freezing order.
Wright goes even furhter, picturing another ominous scenario for Bitcoin miners. Specifically, any miner who receives or mines “stolen” Bitcoin can be pursued by authorities under a nation’s standard theft laws.
“A person handles stolen goods if (otherwise than in the course of the stealing) knowing or believing them to be stolen goods he dishonestly receives the goods, or dishonestly undertakes or assists in their retention, removal, disposal or realisation by or for the benefit of another person, or if he arranges to do so.”
Craig Wright’s statements are built on his assumption that Bitcoin is stolen if bought without CDD or KYC compliance. Currently, no such enforcement of ownership laws regarding Bitcoin exist.
Attorney at law, Preston J. Byrne, states that Wright’s claims have no sense unless a universally accepted “blacklist” of stolen coins was compiled and presented for all to see. Byrne explains:
“If there were a central register of stolen BTC established by law of which every BTC purchaser in a given jurisdiction was deemed to have constructive notice of these claims, notice could be imputed if any party failed to check that register and then accepted payment in blacklisted coins.”
As Byrne highlights, no such register exists today. The law may very well come to meet Bitcoin one day, but will it happen under the circumstances suggested by Craig Wright?