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Kleiman v. Wright Case Update: Man From Belgium Tells Judge He Is Satoshi

A Belgian man has submitted a letter to the judge in the Kleiman v Wright case claiming he is Bitcoin creator Satoshi Nakamoto.

A new person has stepped forward and claimed to be Satoshi Nakomoto, the pseudonymous creator of Bitcoin (BTC). Debo Jurgen Etienne Guido made his claim in a letter filed with a federal courthouse in Florida on July 22. 

Guido addressed his letter to Judge Bruce Reinhart — the judge overseeing the ongoing Kleiman v. Wright case. Guido wrote:

“I hereby testify, by written letter — I am the genuine and only originator/creator of the genesis block of the Bitcoin blockchain. I used the handle Satoshi Nakamoto and mail to write and publish the whitepaper bitcoin.”

The case began back in February 2018 when the estate of the late David Kleiman sued Australian computer scientist and self-proclaimed Satoshi Craig Wright for stealing hundreds of thousands of BTC. Kleiman’s estate brought the case before the United States District Court of the Southern District of Florida, suing Wright for $5 billion.

In a recent development this month, Wright filed court documents in a purported effort to show that he held a trust deed with the estate. Stephen Palley, a lawyer who is apparently known for discussing cryptocurrency cases, argued that these documents were faked in virtue of the document’s metadata. Palley argued that the purported original document uses a Microsoft font that was only copyrighted in 2015, while the document is purportedly from 2012.

Additionally, Craig Wright admitted in June that he could not comply with a court order to list his early BTC addresses. According to Wright, he cannot easily retrieve the data because  he shared a critical component for accessing the funds and wallets with Kleiman prior to his death.

According to an alleged screenshot posted by Guido, Kleiman’s lawyer apparently reached out via Twitter and requested a mutual signing of the BTC genesis block. Guido did not agree to do so in his response, instead saying that he would have to move to a “safe place” and said he should ask Wright to try to sign instead. 

As previously reported by Cointelegraph, popular sci-fi author Neal Stephenson recently denied that he is Satoshi. An article by The Reason had apparently suggested that Stephenson could be Satoshi, based on the interests and knowledge evidenced in his books, which include works like Snow Crash and Cryptonomicon.

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US Elections Regulator Gives Tentative Go-Ahead to Campaign Token

The Federal Election Commission has opened a draft letter to the public, in which they approve of Omar Reyes’ 2020 congressional campaign incentives tokens.

The Federal Election Commission (FEC) has tentatively approved an ERC-20 token issued by Omar Reyes to use in an incentives program for his congressional campaign. The FEC reviewed the coin project in a draft advisory opinion on July 5.

According to the draft letter, the FEC believes Reyes is within his rights to issue his Ethereum-based “Omar2020Token” (OMR) as part of his campaign to join the United States House of Representatives from the 22nd Congressional District of Florida

The FEC argues that because the tokens are essentially souvenirs, with no monetary value, Reyes’ committee is free to issue them as volunteer incentives:

“The Commission concludes that the Committee may distribute OMR Tokens to volunteers and supporters as an incentive to engage in volunteer activities as described in the request because OMR Tokens do not constitute compensation; rather, OMR Tokens are materially indistinguishable from traditional forms of campaign souvenirs and nothing in the Act or Commission regulations prohibits a campaign committee from distributing free campaign souvenirs to volunteers or supporters.”

As noted in the draft, these Ethereum blockchain-based tokens are intended to be used as campaign incentives only. The Omar2020 campaign will reportedly conclude with prizes awarded to the top three OMR holders, but will delete its Ethereum contract and dispose of remaining tokens upon the campaign’s conclusion.

The FEC previously wrote an advisory opinion in 2014 on financing campaigns with the number one cryptocurrency, Bitcoin (BTC). The FEC then said that campaigns could receive BTC as donations, but only as in-kind donations, i.e. as a donation of goods and services and not as money. This means that the BTC cannot be used in transactions directly, but could be converted to fiat money and deposited.

As previously reported by Cointelegraph, Democratic presidential campaigners Eric Swalwell and Andrew Yang have both offered to accept cryptocurrency donations for their campaigns.

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US Judge Says Boxer-Backed ICO Token Is a Security

A Florida district court has published an analysis explaining how a crypto token is a security.

Magistrate judge Andrea Simonton of the Southern District of Florida, in a report on whether to freeze the assets of the Floyd Mayweather-endorsed Centra Tech crypto startup, released a detailed explanation of how the company’s token demonstrates the different aspects of a security under existing law. While it may not be a precedent for other similar court cases, the report may be cited in other legal battles asking whether crypto tokens are securities or not.

The defendants notably are not challenging the assertion that Centra’s CTR token is a security, according to the document. Unlike the case brought by the U.S. Securities and Exchange Commission, this decision is part of a lawsuit filed by previous investors claiming they lost money due to the unregistered securities sale.

As CoinDesk previously reported, the startups co-founders have all been indicted on various securities fraud, wire fraud and conspiracy charges. Part of the case revolves around the idea that the CTR token, which Centra Tech sold to investors, is a security.

The court, quoting from the Howey Rule, said it believes that the token satisfies all three prongs of what defines an “investment contract,” and is therefore a security. The three prongs include the facts that the investment in an asset, investors can benefit financially from the company’s success and the success or failure of Centra Tech was entirely dependent on its founders’ efforts.

The judge explains:

“Because the success of Centra Tech and the Centra Debit Card, CTR Tokens, and cBay that it purported to develop was entirely dependent on the efforts and actions of the Defendants, the third prong is satisfied. Therefore, the offering of Centra Tokens was an investment contract under the Securities Act, such that the Defendants sold or offered to sell securities by virtue of the Centra Tech ICO.”

Stephen Palley, a lawyer with expertise in blockchain and cryptocurrency matters, said in a tweet that though this decision is not a binding precedent for other courts, “it’s what lawyers call ‘persuasive authority’ and pithy enough to be easily quoted in other opinions.”

Read the full analysis below:

Centra_6_25 by CoinDesk on Scribd

Gavel image via Shutterstock

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Florida Is Creating Its Own Crypto Czar

Florida is set to have its own cryptocurrency czar.

The Sunshine State’s chief financial officer, Jimmy Patronis, said in a statement Tuesday that he has created a new position to supervise the state’s cryptocurrency industry. He explained that the new overseer will be tasked with enforcing applicable regulations to protect investors from potentially malicious actors.

“Florida can no longer remain on the sidelines when it comes to cryptocurrency. I have directed my office to create a position that will oversee how current securities and insurance laws apply to Initial Coin Offerings (ICOs) and cryptocurrencies as well as shape the future of these regulations in our state,” Patronis remarked.

Similarly, Patronis said that the position was needed in order to prevent any form of exploitative investment pitches. And while it’s not clear when the position will be filled – or by whom – Patronis said that the steps to be taken are necessary ones.

Indeed, Florida has seen several lawsuits filed in connection with the BitConnect cryptocurrency scam, and the U.S. state was once the home of Cryptsy, the now-defunct exchange service that collapsed in early 2016 and resulted in allegations of fraud, a class-action lawsuit, and a multimillion-dollar judgment.

While he wants to “keep pace with demand and not deter innovation,” Patronis added that “it is absolutely essential that Florida create safeguards to protect our consumers from fraud.”

Cryptocurrencies image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Judge Backs FTC Asset Freeze in Crypto Fraud Case

The Federal Trade Commission (FTC) is seeking to permanently freeze the assets of four men accused of running cryptocurrency referral scams.

The U.S. regulator also asked a federal court in Florida to order the defendants to stop working together or creating new business entities. Further, they would have to provide a list of their assets to the FTC if the proposed injunction is enforced.

As previously reported, the FTC sued the four individuals in the Florida court earlier this month, accusing them of promoting fraudulent referral investment schemes. At the time, the agency said that “this case shows that scammers always find new ways to market old schemes.”

U.S. Magistrate Judge Lurana Snow recommended that the court grant FTC’s motion for a preliminary injunction in a court report dated March 23.

“Based on the argument of the plaintiff’s counsel and evidence presented, the Court is persuaded that Plaintiff is likely to succeed on the merits and that injunctive relief is in the public interest,” Snow wrote. The motion still has to be approved by District Judge K. Michael Moore, however.

The motion followed a temporary restraining order, which Snow also supported, that provisionally froze the assets of My7Network and the Bitcoin Funding Team, as well as Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler.

According to the filing, Snow’s report and recommendation followed a public hearing that the defendants did not attend.

The proposed injunction accuses the defendants of acting deceptively, stating:

“Based upon the [evidence] submitted by the FTC, there is good cause to believe that Defendants Dluca, Gatto, Pinkston, and Chandler have engaged in and are likely to engage in acts or practices that violate Section 5(a) of the FTC Act.”

According to the filing, if Judge Moore grants the motion, the defendants will have two weeks from Snow’s report to object. If they do not, they will be unable to appeal the ruling “except upon grounds of plain error if necessary in the interest of justice.”

Because the temporary restraining order would expire before this two-week period ends, it has been extended until April 9 by Judge Moore, court filings show.

The original TRO was granted near the end of February, but its enforcement was not revealed until mid-March.

The full report and recommendation can be found below:

Dluca Et Al Report and Recommendation by CoinDesk on Scribd

Court image via Felix Lipov / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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US Trade Regulator Shuts Down Crypto Investment Scheme Promoters

A U.S. district court in Florida has issued a temporary restraining order against four individuals accused of operating a string of cryptocurrency investment schemes following a request from the Federal Trade Commission.

The agency announced Friday that three of the four defendants – Thomas Dluca, Louis Gatto, and Eric Pinkston – were involved in two referral schemes, Bitcoin Funding Team and My7Network. A complaint dated February 20 and unsealed today alleged that they promised would-be investors major returns if they made initial payments in cryptocurrency, mentioning bitcoin and litecoin specifically.

“The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income. The FTC alleges, however, that the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments,” the agency said.

A fourth named defendant, Scott Chandler, was accused of promoting Bitcoin Funding Team as well as another alleged scam called Jetcoin. Like the others, Jetcoin was pitched as a money-making enterprise to investors but failed to yield the promised results prior to its collapse.

According to the FTC, the assets of the four defendants have been frozen pending a formal trial.

“This case shows that scammers always find new ways to market old schemes, which is why the FTC will remain vigilant regardless of the platform – or currency used. The schemes the defendants promoted were designed to enrich those at the top at the expense of everyone else,” Tom Pahl, acting director of the FTC Bureau of Consumer Protection, said in a statement.

The full complaint can be found below:

Dluca – Bitcoint Funding Team Complaint by CoinDesk on Scribd

FTC seal image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Florida Gov’t Agency Employee Arrested For Mining Crypto Using Dept. Computers

An IT manager from the state of Florida’s Department of Citrus (FDoC) has been arrested this week for using the FDoC’s computer system to mine for cryptocurrencies, according to a Tampa Bay Times article published March 13.

According to the Florida Department of Law Enforcement (FDLE), FDoC employee Matthew McDermott was using computers in the Department of Citrus to mine for cryptocurrencies including Bitcoin (BTC) and Litecoin (LTC).

Crypto mining requires a large amount of electricity, and the utility bills for the Department of Citrus had jumped more than 40 percent from October 2017 to January 2018, around $825.

McDermott has been charged with grand theft and official misconduct and is currently at Polk County jail. The FDLE also noted that McDermott had purchased 24 graphic processing units for over $22,000 using a “state purchasing card” from July to December.

In February of this year, several engineers were arrested at a Russian nuclear power center for attempting to use a supercomputer to mine for Bitcoin.

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Florida State Employee Arrested for Allegedly Mining Crypto at Work

A state employee at Florida’s Department of Citrus (FDoC) has been arrested for allegedly using official computers to mine cryptocurrencies.

According to the Tampa Bay Times, the Florida Department of Law Enforcement (FDLE) has jailed Matthew McDermott, IT manager for the state government agency that oversees Florida’s citrus industry. He is reportedly being held pending trial, with bail set at $5,000.

The FDLE alleges that McDermott used computers in the department to mine cryptocurrencies including bitcoin and litecoin, and has charged him with grand theft and official misconduct, according to the report.

An investigation further indicated that the utility bill of the department had surged by over 40 percent from October 2017 to January 2018, as cryptocurrency mining requires significant amounts of electricity due to its high processing demands.

The FDLE said McDermott had also purchased 24 graphic processing units on the office’s account at a cost of around $22,000, according to the report. GPUs are commonly used for cryptocurrency mining given their ability to crunch numbers much faster than standard computer chips.

The news marks the latest instance in the U.S. of official employees being prosecuted for using public resources to mine cryptocurrencies.

Just last week, it was reported that the U.S. state of Louisiana has begun investigating former staffers for using official resources to the mining activity.

Florida state image via Shutterstock

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Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

A lawmaker in Florida has introduced a bill that, if passed, would create a legal foundation for blockchain data and smart contracts in the U.S. state.

House Bill 1357 introduces multiple stipulations that blockchain ledgers and smart contracts be treated as legally-binding methods of data storage – provided that such measures do not break any pre-existing laws or regulations.

Notably, the bill states that a “record or contract that is secured through blockchain technology is in an electronic form and is an electronic record,” and confirms that a signature recorded through a blockchain also qualifies as a valid electronic signature.

As a result of these qualifications, the bill outlines that, if a person uses a blockchain to secure interstate or foreign commercial ventures, it would not impact ownership rights. In other words, if someone used a blockchain ledger to store information, the bill would legally recognize that person’s rights to that information.

Similarly, the bill states:

“A contract may not be denied legal effect or enforceability solely because: 1. An electronic record was used in the formation of the contract [and] 2. The contract contains a smart contract term.”

If signed into law, the bill would make Florida the latest state to recognize blockchain records and smart contracts. Last year, Arizona passed a similar measure, with identical notes on confirming blockchain records as electronic records, as well as giving smart contracts legal force.

A slightly different bill in Vermont, when passed in 2016, allowed for the use of blockchain-based data as evidence in court.

Florida flag image via KMH Photovideo / Shutterstock

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5 Cities That Let You Buy Real Estate with Bitcoin

Bitcoin is a next-gen, all-digital currency that’s already a global phenomenon.

Developed with high levels of security and anonymity in mind, it’s touted as a potential replacement for paper- and coin-based money in the near future.

Some industries, including real estate, are capitalizing on this emerging trend by letting clients buy property via Bitcoin. It’s a significant departure from tradition, but it’s one that is quickly gaining momentum.

1. Miami, Florida

A Miami man recently made news by selling his home in Coral Gables for over $6 mln — or approximately 1,600 BTC.

The steep selling price is enough to rattle the headlines, but Bitcoin has been a part of the Miami real estate market for several years. Although it was only launched in 2009, tech-savvy real estate agents, investors and buyers quickly embraced the new cryptocurrency.

Realtors in the area are confident that South Florida — particularly Miami — is an ideal market for Bitcoin. They cite the worldwide reach of Bitcoin as a primary factor in driving increased interest and attention to the region. Using an alternate form of currency opens up properties to buyers and investors from all over the world, including Asia, Canada, South America and more.

2. Dubai, UAE

The United States isn’t the only country to capitalize on the growing Bitcoin trend. A developer located on the Isle of Man recently announced plans for a joint residential-commercial development valued at $325 mln. Prospective residents will be able to use Bitcoin to purchase their property, with studio apartments starting at 33 BTC and one-bedroom apartments from 54 BTC — or approximately $250,000.

Some of the development’s units have already been sold for modern currency, but the remaining residential properties are reserved for Bitcoin purchases. Commercial units are not currently available for purchase via the popular cryptocurrency.

3. New York, New York

Investors and real estate agents in The Big Apple also believe Bitcoin is the way of the future. The team with Magnum Real Estate is assuming a huge risk by accepting Bitcoin for deposits and purchases for recently converted apartments in Manhattan’s East Village. Known as Liberty Toye, the property represents a huge shift in the way we conduct business this century.

Real estate investment trusts have been looking to diversify their portfolios this year, and New York City provides the ideal launching ground. Known as an entrepreneurial-minded city that isn’t afraid to take risks, we already see homes and apartments available for Bitcoin. It’s only a matter of time until commercial buildings follow suit.

4. Lake Tahoe, California

The popular vacation destination of Lake Tahoe accepts Bitcoin, too. An unnamed buyer recently purchased a 1.4-acre property with Bitcoin on a 42-site resort. The undeveloped property sold for $1.6 mln, or 2,739 BTC, making it the largest Bitcoin-driven real estate transaction at the time it happened in 2013.

According to reports, the Bitcoin purchase was originally the buyer’s idea. While we haven’t seen any further developments involving Bitcoin in the Lake Tahoe real estate market, the sale shows off the potential of digital currency in the industry and opens the way for future deals in both the residential and commercial sectors.

5. Bali, Indonesia

The island of Indonesia isn’t the first place you’d expect to see a Bitcoin-backed real estate transaction, but it was actually among the first locations to support the cryptocurrency.

An unnamed buyer spent more than 800 Bitcoins, totaling approximately $500,000 at the time, for a villa in Bali.

Although residential real estate agents and buyers are comfortable with using Bitcoin to purchase real estate in Bali, we have yet to see any listings in the commercial or industrial markets.

Bitcoin and the future of real estate

Despite the uncertainty of the Bitcoin market, tech-savvy investors and agents are — at least for the time being — willing to take a risk on the cryptocurrency.

There are many advantages in doing so, but the risks are too steep for some to take the plunge.