Jack Dorsey's Bitcoin Fund Gears Up for Legal Battle with Implications for Open-Source Developers

Bitcoin Legal Defense Fund

The Bitcoin Legal Defense Fund, a non-profit organization co-founded by Jack Dorsey, Alex Morcos and Martin White, is backing 13 Bitcoin Core developers facing lawsuits by Craig Wright. The cases could potentially have major impacts on the future of Bitcoin and open-source software development.

Eleven of the developers being supported by the Fund will file their defense on April 26. Tulip Trading Limited v. Bitcoin Association For BSV & Others, in which the developers are named, stems from an alleged hack in February 2020 that resulted in the loss of 111,000 bitcoin that Wright claims to own.

In February 2021, Tulip Trading issued a “Letter Before Action” announcing its intention to take legal action against certain Bitcoin developers to recover the allegedly lost bitcoin.

Should the UK courts rule in Tulip Trading’s favor, open-source developers could be considered fiduciaries to users of software that they have contributed to, even in projects without any formal assumption of duty or compensation for costs and associated risks.

Alex Morcos, the co-founder of Chaincode Labs and the Bitcoin Legal Defense Fund, said, “the Tulip Trading case threatens not only the MIT License but also the very notion of freedom of speech.”

Craig Wright has also brought a second lawsuit against Bitcoin developers in which he alleges that he is Satoshi Nakamoto, the pseudonymous creator of Bitcoin, and thus owns the copyright for the Bitcoin Whitepaper and the database rights for the Bitcoin blockchain.

Should Wright be successful, “it would, in the eyes of the law, allow Craig Wright ultimate control over the Bitcoin network,” a press release sent to Bitcoin Magazine says.

However, it should be noted that Bitcoin is a protocol and network made up of all its participants worldwide. Bitcoin can not be controlled by any one individual, institution, or government. The law cannot give anyone complete control over the Bitcoin network.

Jess Jonas, the Chief Legal Officer of the Bitcoin Legal Defense Fund, said: “We believe that these lawsuits are frivolous, but we still have to oppose them vigorously … fighting for the right of developers to create free and open-source software without fear of legal retaliation.”

Jack Dorsey, CEO of Block and co-founder of the Bitcoin Legal Defense Fund, said, “the outcomes of these cases are important for everyone, even those who may not be interested in Bitcoin, because these lawsuits could have serious detrimental effects on open-source development writ large, which will negatively impact our lives in ways we may not even realize until it’s too late.”

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