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Jessica Jonas, General Counsel for the non-profit Bitcoin Legal Defense Foundation, discussed the potential legal implications of the high-profile lawsuit against Bitcoin core developers during the Bitcoin 2023 event in Miami on May 18.
This is a UK lawsuit filed by Craig Wright, the owner/operator of Tulip Trading. Wright is perhaps best known for his claim that he is the creator of Bitcoin, Satoshi Nakamoto, a claim that sparked yet 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 case between Tulip Trading and 14 named individuals allegedly involved in the development of the open source code of Bitcoin Core and others, Wright claims that the said developers have a fiduciary duty to him. Jonas described the case as “an allegation that Tulip Trading allegedly owned 111,000 Bitcoins and was allegedly hacked and lost those 111,000 Bitcoins in some Ocean’s 11-style hack.”
To be compensated for the alleged loss, Wright is demanding, according to Jonas, that Bitcoin developers “create a loophole in the main Bitcoin blockchain so that Tulip Trading can recover the funds it allegedly lost.” be implemented:
“They are asking the court to order this software development team to write a patch to the software that diverts funds. Bitcoin doesn’t work that way. This is impossible.”
Jonas explained that implementing such a change would require a hard fork of the Bitcoin blockchain and then waiting for everyone in the world to switch to the new fork instead of continuing to use the existing main chain. Describing the area of law related to fiduciary duties as “difficult”, Jonas went on to describe litigation as extremely dangerous for reasons that go beyond technical limitations.
“In fact, this case has already been appealed, and the Court of Appeal concluded that the issue of whether open source developers should have a fiduciary obligation towards people using their code is an important one,” Jonas said. In addition, Jonas called the potential threat to the open source community “existential”. “Open source software makes up 97% of the world’s software,” she said.
Related: 7 People Who Might Have (or Not Be) Bitcoin Creator Satoshi Nakamoto
Jonas also presented the case as a free speech issue. Although many of the defendants named in the lawsuit are US citizens working in the US, the case is being heard in the UK under an appeal court ruling that it has jurisdiction due to a possible public interest outcome in that country. ..
According to Jonas, software development is considered free speech in the US, and in her assessment, “Tulip Trading is taking a civil action in a UK court to get many Americans to speak up.” Although a British court cannot necessarily enforce free speech laws in the US, Jonas opposed the idea that a court ruling in Wright’s favor would be far-fetched.
Bitcoin open source development is licensed from the Massachusetts Institute of Technology. Since open source software is usually available to anyone, anywhere, placing fiduciary responsibilities on developers can lead to someone in one country being liable for damages to someone in another simply because they participated in the project with open source. The current law, Jonas explained, is designed to protect open source developers from lawsuits from strangers:
“They volunteer their time to work on public infrastructure. They do it for free. They do it under a license from the Massachusetts Institute of Technology, which is supposed to protect them from such things.”
