A computer scientist claiming to be the inventor of Bitcoin will have to stump up nearly a quarter of a million pounds in cash rather than Bitcoin as security against adverse costs in a multi billion-pound legal claim, the High Court has ruled. 

Following his decision earlier this month over a claim brought by Seychelles company Tulip Trading against overseas-based parties involved in Bitcoin development, Master Clark ruled that the claimant should provide 70% of the claimants' incurred and estimated costs. Tulip is controlled by Dr Craig Wright (pictured above), an Australian citizen resident in the UK. Wright claims that the 16 defendants owe a duty to rewrite software to enable him to recover encryption keys to bitcoins worth $4.5 billion (£3.29bn) which he says have been deleted by hackers.

The defendants deny any such duty and 15 of them are challenging the High Court's jurisdiction to hear the case. They argued that Tulip Trading, which does not have a UK presence, should be required to provide security against any adverse costs order in the jurisdiction hearing.  

Accepting the defendants' cost estimates of £355,000, the judge noted that the proceedings might justiry higher than guideline rates. 'The value of the claim is well over $4 billion; it involves considerable factual, technical and legal complexity; it has an international element; and has important implications for the Bitcoin system as a whole.'

The costs judge noted that the claimant had offered to provide security 'by way of digital assets', supplemented with a 10% buffer to cater for Bitcoin volatility. Payment in cryptocurrency was needed because Tulip Trading does not have a UK bank account and that converting digital assets into sterling would incur capital gains tax liabilities.

However the judge noted that the security offered 'would not result in protection for the defendants equal to a payment into court, or first class guarantee. It would expose them to a risk to which they would not be exposed with the usual forms of security: namely a fall in value of Bitcoin.' The price of bitcoins has nearly halved since a peak of $68,789 (£51,176) last November.

He ordered Tulip Trading to provide a total of £248,353. He assessed the defendants' costs at the security hearing at £73,496. 

In other litigation involving Wright, the Court of Appeal this month gave the go-ahead to the next stage of a defamation claim over podcaster Peter McCormack's comments about Wright's assertion that he is 'Satoshi Nakamoto', the pseudonymous inventor of Bitcoin. Lord Justice Warby ruled that a hearing to decise whether McCormack's social media posts caused 'serious harm' will take place on 23/24 May.