Jessica Jonas, legal director of the nonprofit Bitcoin Legal Defense Fund, discussed the potential legal ramifications of a high-profile lawsuit against Bitcoin’s core developers during the Bitcoin 2023 event in Miami on May 18.
The case in question is a UK legal action brought by Craig Wright, 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 prompts 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 people allegedly involved in the open source development of Bitcoin Core, and others, Wright alleges that those developers owe him a fiduciary duty. Jonas described the case as “an allegation that Tulip Trading allegedly owned 111,000 Bitcoin and was allegedly hacked and lost that 111,000 Bitcoin in a very Ocean’s 11-style hack.”
In order to obtain compensation for the alleged loss, Wright demands, according to Jonas, that the Bitcoin developers “create a back door in the main Bitcoin blockchain so that Tulip Trading can recover the funds it allegedly lost,” a solution that Jonas claims cannot be applied:
“They are asking the court to order this group of software developers to write a patch to the software that siphons off the funds. That’s not how Bitcoin works. It’s impossible.”
Jonas explained that implementing such a change would require a hard fork of the Bitcoin blockchain and then waiting for everyone to move to the new fork instead of continuing to use the existing core chain. Jonas called the area of law surrounding fiduciary duty “complicated” and described the lawsuit as extraordinarily dangerous for reasons that go beyond technical limitations.
“In fact, this case has already been appealed and the appellate court considered that the question of whether open source developers should have a fiduciary duty to the people who use their code is an important one,” Jonas said. Additionally, Jonas described the potential threat to the open source community as “existential.” “Open source software makes up 97% of the world’s software,” he said.
Jonas also framed the case on a free speech issue. Despite the fact that many of the defendants are US citizens operating in the US, the case is being tried in the UK by decision of the court of appeal, which declared jurisdiction because the possible outcome was in the public interest of that country.
According to Jonas, software development is considered free speech in the US and, according to him, “Tulip Trading is acting before a British court in a civil action to force many Americans to speak.” Although the British court can’t necessarily enforce free speech laws in the US, Jonas objected to the idea that it would be unreasonable for the court to rule in favor of Wright.
The open source development of Bitcoin is under the MIT Open Source License. Since open source software is generally available to anyone, anywhere, assigning fiduciary duties to developers could lead to a situation where someone in one country is liable for damages caused to someone in another simply for having contributed to it. an open source project. The current law, Jonas explained, is meant to protect open source developers from being sued by outsiders:
“They volunteer their time to work on public infrastructure. They do it for free. They do it under an MIT license, which is supposed to protect them from things like this.”
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