Welcome to Satoshi Itches Thursday, August 22 2019 @ 07:25 AM UTC

#211 All Craig's coins are hidden (from everyone) in the Tulip Trust

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Docket entry #211 is available on Court Listener. Here, Craig purports that all the coins he allegedly mined after block 70, until the end of 2010, are locked in an encrypted file that can only be opened by a subset of N keys. Therefore, he cannot provide any information about them, until the "Tulip Trust" opens up.

In other words, Craig's evidence is locked in an encrypted file that he cannot access.

This is all very mysterious. Firstly, the plaintiffs have been requesting the list of bitcoin addresses containing coins mined by Craig for several months. Craig's objection was that it would be unduly burdensome to figure that out. Only once compelled by the court to reveal them has Craig revealed that it is, in fact, impossible to reveal them. Why not just say that in the first place?

Secondly, a bitcoin wallet containing private keys, or a seed value that can be used to generate a list of addresses, is easily copied. Craig would have us believe that he put his wallet and/or seed into an encrypted file, but did not take any copies or backups of them. How can the trustee know that Craig does not have a backup? Sending private keys is not the way bitcoin are transferred from one person to another, since the original person could always keep a copy.

There are also no details of how the wallets/seed were encrypted and the key shares distributed. Whoever physically encrypted the data would have access to the "master decryption key". They would also have access to all the sub-keys that were then distributed. This person can open the archive. Likewise, how are the keys to be recombined at a later date to open the archive? Whoever coordinates that will be in a position to steal billions of dollars of bitcoin. If Craig is deposed, I hope he has to answer these questions.

This all sounds far too convenient for Craig. He's basically claiming to own these bitcoin while also claiming there is no evidence at all that he does. He is also claiming that he implemented his "proprietary" deterministic private key generator software one week after launching the bitcoin network, before it had gained any traction at all. He chose not to share this code with anyone, even though it would have been a very useful update to the bitcoin client that other people would have used. (Deterministic wallets did later become a feature of most clients, but this was not created by Satoshi or Craig.)

If Craig's plan is to stall and confuse the judge, then it seems it is not working. The judge wants the list, and seems to be getting very annoyed with Craig's antics, and his lawyer's gullibility. I'm expecting fireworks soon.