A U.S. court in Florida has declined a request from W&K Info Defense, which won over $100 million in damages from Craig Wright in December 2021, to criminally sanction Wright for not correctly filling out a financial disclosure statement but has recommended that a higher ranked judge look into possible civil sanctions.
At the center of the case is Wright's compliance with a compulsion order that required him to complete a financial disclosure form by April 3, 2023. The form is a crucial step in judgment collection, necessitating a detailed account of the debtor's financial situation. Magistrate Judge Bruce Reinhart found that an initial version of this form was incomplete, but a new version filed on July 24 complied with the order in a ruling dated Sept. 12.
"At oral argument, Dr. Wright’s counsel conceded that the March 30 version of the Form omitted required information,” the document reads. “That version of the Form did not include (among other things) his employer’s address, any information about his spouse, and information about whether he had bank accounts."
“He does not contend that he lacked the ability to comply with the Compulsion Order," the document continues.
W&K Info Defense also challenged the lack of disclosure about property in Wright’s native Australia, as well as bitcoin holdings.
“Wright … appears to be generating income from selling bitcoin,” the firm argues.
In the filing, Wright contends that the court orders do not require him to disclose bitcoin held on-chain, which Magistrate Judge Bruce Reinhart agreed with.
As a magistrate judge, he cannot hold a defendant in contempt of civil proceedings himself, but can "certify the facts to a district judge." In this case, Judge Reinhart certified that there was a period between March and July where Wright did not provide the information he was required to, referring the case to District Judge Sarah Bloom to review. He did not set a timeline for a possible court hearing before the district judge.
The court also denied W&K Info Defense’s request that a restraining order be placed on Wright’s assets, a $250,000 per day penalty, and attorney fees. However, Judge Reinhart gave the green light to “remedial civil contempt proceedings.”
CORRECTION (Sept. 14, 2023, 14:20 UTC): Clarifies that while Judge Reinhart certified facts suggesting civil contempt sanctions to a more senior judge, he did not impose any sanctions himself.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.