Judge says Craig Wright's explanation for lost bitcoins "defies common sense."

Australian Internet personality Craig Wright claims he is bitcoin inventor Satoshi Nakamoto. A lot of people don't believe him. But one person who does believe him is Ira Kleiman, the brother of deceased technologist Dave Kleiman. According to possibly forged emails published by Gizmodo in 2015, Wright and Kleiman worked together to develop and launch bitcoin in 2008 and 2009.

Those documents suggested that Wright and Kleiman collaborated to mine hundreds of thousands of bitcoins in 2009 and 2010. That would make Ira Kleiman the heir to a multibillion-dollar fortune. So last year, Kleiman sued Wright, seeking his share of the Nakamoto bitcoins.

Kleiman and Wright have been battling in a Florida courtroom ever since. In a Tuesday ruling, federal Magistrate Judge Bruce Reinhart savaged Wright for repeatedly misleading the court and generally wasting everyone's time.

Wright claims that after drug dealers and human traffickers started using bitcoin, Wright got spooked and decided to dissociate himself from the cryptocurrency. He created a legal entity called the Tulip Trust, with him and Dave Kleiman as trustees. Then he encrypted the keys to his bitcoin holdings using an encryption scheme that required multiple keys to unscramble the data. With Kleiman dead, Wright claims he can no longer unscramble the file.

Judge Reinhart isn't buying it.

"Dr. Wright's demeanor did not impress me as someone who was telling the truth," the judge wrote. "I completely reject Dr. Wright's testimony about the alleged Tulip Trust, the alleged encrypted file, and his alleged inability to identify his bitcoin holdings." Indeed, Reinhart concluded that "Wright’s testimony that this trust exists was intentionally false."

"Dr. Wright’s story not only was not supported by other evidence in the record, it defies common sense and real-life experience," the judge added. More generally, Reinhart found that Wright's "non-compliance with the court's orders is willful and in bad faith."

The judge invited Kleiman to submit a request for attorney's fees in the case. And crucially, he ruled that any bitcoins Wright mined prior to 2013 were the joint property of Wright and Kleiman.