How Jack Dorsey’s Bitcoin Legal Defense Fund is fighting for the future of open source software

A crypto wallet The theft lawsuit filed by a man claiming to be Bitcoin creator Satoshi Nakamoto could jeopardize the future of open source software development.

That’s according to the Jack Dorsey-backed Bitcoin Legal Defense Fund, which is taking on a case to defend 11 Bitcoin developers named in a lawsuit filed by Craig Wright, an Australian computer scientist who rose to the spotlight in 2016 with a very disputed claim. of being the founding father of Bitcoin.

The crux of the case in question dates back to 2021 when Wright, through a Seychelles-based company called Tulip Trading, launched a so-called “pre-action letter” against 16 Bitcoin software developers, in a attempt to regain access to £4 billion. ($5 billion) worth of Bitcoin he claims to own. Wright he said he lost access to private keys for 111,000 Bitcoins after his home network was hacked the previous year, and that it was the responsibility of key developers of Bitcoin Core (the main software version of the Bitcoin protocol) to remedy illegitimate cryptographic transactions.

Although the case was initially dismissed last year before going to court, a UK appeals court overturned that decision in March, allowing the case to proceed with a trial scheduled for 2024. In his findings, Lord Justice Birss targeted an academic professor. literature that questions whether public blockchains are truly decentralized.

“If the decentralized governance of Bitcoin is indeed a myth, then in my judgment there is much to be said for the presentation that the developers of bitcoin, while acting as developers, owe fiduciary duties to the true owners of that property “, he wrote.

Thus, on Wednesday of this week, 11 Bitcoin developers presented their defense with the support of the Bitcoin Legal Defense Fund, a non-profit organization created in 2021 by the co-founder of Twitter and Block (formerly Square) Jack Dorsey; Block’s head of litigation, Martin White; and Chaincode Labs co-founder Alex Morcos. The fund now also includes legal director Jess Jonas, who joined in January.

‘Multifrontal Litigation’

The founders of the fund initially wrote an open letter to Bitcoin developers last year to explain theirs purpose. They noted the “multi-front litigation” facing the Bitcoin community, including the efforts of Craig Wright who they confirmed at the time would be leading the defense. Although they noted that the primary purpose of the fund was to advocate for developers “of lawsuits related to their activities in the Bitcoin ecosystem,” they also noted that the ramifications extended much deeper into the broader open source realm.

“Continued litigation and threats are having the intended effect: individual defendants have chosen to capitulate in the absence of legal support,” the trio wrote. “Open source developers, who are often independent, are particularly susceptible to legal pressure. In response, we propose a coordinated and formalized response to help defend developers.”

A familiar story

Indeed, the issue of the legal system interfering with open source software development has become a hot topic of late. In a letter to EU authorities last week, more than a dozen open source industry bodies said the newly proposed Cyber ​​Resilience Act, which aims to codify cybersecurity practices for digital products sold in Europe, it can have a “chilling effect” on software development. since open source developers could be held personally liable for security flaws that occur in a later product. In other words, if the Act is passed in its current form, developers could be less inclined to contribute to open source projects for fear of legal disputes.

Elsewhere, some argue that the upcoming EU AI Law, which aims to govern AI applications based on perceived risks, could create onerous legal liability for general purpose AI systems (GPAIs) and give more power to big, well-funded tech companies.

Although the latest episode that arose around Bitcoin is a little different, it gives rise to similar problems. The overarching story may be about who does or doesn’t control Bitcoin, and whether the project’s core developer base should be forced to create some kind of “backdoor” to provide third-party access to private keys. But simmering beneath the surface is something fundamental to the future of software and whether open source developers should have a fiduciary duty to their users.

“We believe these demands are frivolous, but we must still oppose them forcefully,” Jonas said in a statement.

Legal responsibility

The key element of the defendants’ case is the simple fact that Bitcoin was released under an open source MIT license, which gives little legal liability to those who maintain the software. The MIT license explicitly states:

In no event shall the authors or copyright holders be liable for any claim, damages or other liability, whether in an action in contract, tort or otherwise, arising out of, out of or in connection with the software or the use or other dealings in the software.

But yes, for whatever reason, a court was to rule alongside Tulip Trading, this could effectively destroy one of the core principles of the MIT License that underpins countless open source projects today, setting a dangerous precedent that binds open source developers, many of whom work on their own time in his own time. own cent – to serve the end user of this software, regardless of their demands.

“The Bitcoin Legal Defense Fund fights not just for Bitcoin, but for the right of open source developers to freely create and share their code with the world for the greater good,” Morcos said in a separate statement. “The Tulip Trading case threatens not only the MIT license, but the very notion of free speech. Our collective mission is to safeguard innovation by protecting developers from legal intimidation.”

Although there are 16 defendants in total, the Bitcoin Legal Defense Fund only represents 11 developers who worked on Bitcoin Core. There is a 12th Bitcoin Core defendant who has not sought help from the Bitcoin Legal Defense Fund, in addition to 4 other defendants who have worked on various Bitcoin forks who are arranging their own counsel.

Separately, Wright has launched a secondary case against other Bitcoin developer entities, with Wright claiming ownership of the copyright and Bitcoin database on the basis that he is Satoshi Nakamoto. That case was dismissed in February, but the lawsuit quickly resurfaced in a revised form with the defendants filing their defense last month. The Bitcoin Legal Defense Fund also supports two Bitcoin Core developers named in this lawsuit.

“The results of these cases are important to everyone, even those who may not be interested in Bitcoin, because these lawsuits could have serious damaging effects on open source development in general, which will negatively affect our lives in ways we may not even realize until it’s too late,” Dorsey added in a statement.