On 01 August 2022, the much-awaited judgment in the libel claim of Wright v McCormack was handed down.  At the centre of the dispute was the identity of Satoshi Nakamoto. 

Following publication of a “white paper” in 2008 entitled “Bitcoin: A Peer to Peer Electronic Cash System” under the pseudonym “Satoshi Nakamoto”, it is widely believed that the author (or authors) went on to invent Bitcoin.  Bitcoin is a decentralised digital currency that can be transferred from peer to peer through the Bitcoin network.  It is widely recognised as the world’s first successful form of cryptocurrency and payment system, that was launched in 2009. 

There has been much speculation around the identify of Satoshi and the creation of Bitcoin, not least as digital assets, such as NFT and the blockchain technology, become more accessible and visible in their application to our everyday lives.  

The Judgment does not confirm whether Dr Wright is “Satoshi Nakamoto” as the Defendant, Mr McCormack, abandoned a defence of truth on the basis that he could not afford to fund legal representation for a 3 week trial.  The Judgment is however interesting in that whilst Dr Wright was successful, he was awarded £1 in damages.  We look at what happened and why Dr Wright was awarded £1.

Who are Dr Craig Wright and Peter McCormack?

Dr Wright is a computer scientist and businessman well-known within the cryptocurrency sphere.  Dr Wright avers that he is Satoshi Nakamoto.  Peter McCormack, the Defendant, is a podcaster and blogger, with a large social medial following in the cryptocurrency sphere.

What was Dr Wright’s claim?

Dr Wright commenced a claim in respect of several tweets and a YouTube video published by Mr McCormack and a YouTube video in the period between March 2019 and October 2019.  The publications alleged that Dr Wright had fraudulently claimed to be Satoshi Nakamoto.  Dr Wright claimed that because of the publications he had suffered serious reputational harm.

What did the Judge have to decide?

Mr McCormack abandoned his defence of truth (i.e. that the statements published were substantially true) so that the identity of “Satoshi Nakamoto” was not in issue but the Judge had to consider the meaning of a YouTube video, liability for that publication, whether Dr Wright was able to satisfy the “serious harm” test, and if so, to what remedy Dr Wright was entitled.

In total, there were 16 publications in issue; 15x tweets and 1x YouTube video.  It was agreed that the meanings of the tweets were that Dr Wright’s claim to be Satoshi Nakamoto was fraudulent, not merely that there were reasonable grounds to suspect as much.

Mr McCormack alleged that, taken as a whole, in circumstances where others participating in the YouTube discussion made comments to the effect that Dr Wright is Satoshi Nakamoto, the comments he made meant no more than that there were “reasonable grounds for questioning or inquiring as to whether that Claimant had fraudulently claimed to be [Satoshi Nakamoto]”” and that Mr McCormack was adopting a “polemical and outspoken approach”, so that the words would be “viewed with scepticism”.  The Judge agreed with Mr McCormack but held that whilst less serious than the meaning of the tweets, it was still defamatory. 

There was also an issue of whether Mr McCormack was liable for the YouTube publication, having joined a livestream hosted by a third party and which was re-posted as a recording on YouTube.  Mr McCormack accepted that he was liable for the livestream but denied liability as to the re-publication on YouTube.  That argument failed.

“Serious harm”

To succeed in an action for defamation, having established that a statement has been published that identifies the claimant and that is defamatory, a claimant must satisfy the “serious harm” test. 

In this case, there was a considerable procedural history as the parties filed and served amended statements of case but in summary, Dr Wright alleged that he could point to specific instances of serious harm that included invitations to speak at and present academic papers outside of England & Wales that had been withdrawn, the devaluing of patents, and abandoning an application to be appointed as a Magistrate. 

As the case progressed towards Trial, Dr Wright amended his pleading to no longer rely upon the instances of the withdrawal of invitations for events outside of England and Wales.  Despite withdrawing days before Trial, the timing of abandoning this part of the claim and evidence that Dr Wright gave was carefully considered.  The Judge concluded that the original case on serious harm and supporting evidence were deliberately false, and that the explanation given that Dr Wright had determined to confine his case to damage to reputation arising from disinvitations from within the jurisdiction did not withstand scrutiny.  

The Judge did, however, find that it was more likely than not that the publications complained of each caused serious harm to Dr Wright’s reputation.  This is worth noting, in circumstances where Mr McCormack argued any damage was in fact caused by other publications that made the same or similar allegations to the words complained of.  Ultimately, the Judge did not get into arguments of quantum, as he decided to award a nominal sum of £1 to Dr Wright.

Why was Dr Wright awarded a £1?

The Judge held that had it not been for Dr Wright’s “deliberately false case on serious harm advanced…until days before trial” a more than minimal award of damages would have been appropriate.  The Judge said that it would be “unconscionable” to award more that nominal damages of £1.

The Judgment is a stark reminder of parties’ obligations to satisfy themselves of the truth of any statement of case or witness statement before signing a statement of truth, and before offering that evidence to the Court.

What does the Judgment mean for those that use social media?

The case discusses issues particular to the use of social media platforms, including where a defendant may find themselves drawn into an online conversation.  The Judge commented that whilst several tweets could be said to have resulted from Mr McCormack being goaded by an associate or supporter of Dr Wright to generate a basis for a claim in defamation, that did not provide a defence.   The Judge commented this conduct may have reduced the size of any damages award.

The Judge also pointed out that whilst there were statements published that were flippant in tone, Mr McCormack was a well-known podcaster and recognised expert in cryptocurrency, and he was willing to express his views “brazenly” and firmly.   Given the often temporary and informal nature of social media, the case provides a stark warning to users of the risks before posting.

The Judge also considered the “reach” of the publications, with both parties submitting figures of the number of readers in the jurisdiction.  The Judge did not get into this in detail, as he decided to award £1 in damages but had there been a quantum assessment, that would have been explored.