The former Twitter CEO Jack Dorsey recently announced a ‘Bitcoin Legal Defense Fund’ aiming to aid Bitcoin open-source developers facing litigation.


The Fund is a non-profit entity. It was announced through an email addressed to developers. The effort comes from the susceptibility of developers involved with bitcoin and its products to legal pressure, as Dorsey described. He stated that “The Bitcoin community is currently the subject of multi-front litigation”.

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This effort would add needed muscle to the defense of the popular Tulip Trading Lawsuit. Many of the litigated devs cannot afford a proper legal defense, and in addition, the letter claims this event has discouraged developers to continue their activities on the network. “we propose a coordinated and formalized response to help defend developers,” Dorsey wrote.

“The Bitcoin Legal Defense Fund is a nonprofit entity that aims to minimize legal headaches that discourage software developers from actively developing Bitcoin and related projects such as the Lightning Network, Bitcoin privacy protocols, and the like.”

The announcement was widely cheered by the community, who agrees the developers deserve this kind of support and the chance to fight back. The founder of TFTC Marty Bent tweeted:

“Shoutout to @jack, Alex Morcos and Martin White for stepping up to protect Bitcoin developers from getting bogged down by lawsuits so they can focus on what they do best.”

How Will The Fund Work

“This is a free and voluntary option for developers to take advantage of if they so wish.”

There are still unknown details about the Fund that the letter promised to share in the near future. However, at the moment we know that its board will most likely be formed by Jack Dorsey, Chaincode Labs co-founder Alex Morcos, and academic Martin White, who will determine future decisions about allocating the resources.

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Besides providing financial aid for the outside counsel, the non-profit entity will start its activities by having a staff of volunteers and part-time lawyers who will play a role in defending the developers.

“The main purpose of this Fund is to defend developers from lawsuits regarding their activities in the Bitcoin ecosystem, including finding and retaining defense counsel, developing litigation strategy, and paying legal bills,”

The letter clarifies that the Fund is not “seeking to raise additional money for its operations but will do so at the direction of the board if needed for further legal action or to pay for staff,”

As mentioned, the first project they will provide funding for is the Tulip Trading lawsuit, a critical legal action that alleges breach of fiduciary duty against several developers.

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The Tulip Trading Lawsuit

This lawsuit involves the Australian businessman Craig Wright, who claims to be the creator of Bitcoin Satoshi Nakamoto, but the community sees him as a scammer.

Mr. Wright has filed a £3.5 billion (around $4,7 billion) suit against 16 developers with related Bitcoin activity. In the legal filing, he claims that after losing the encrypted keys of 111,000 BTC to a hack, the software developers refused to deliver it back to him.

His story doesn’t add that he failed to prove ownership of the currency, but the lawsuit goes beyond his vague narrative since his legal team further alleges that the developers are legally responsible to “avoid illegitimate transactions being entered onto the blockchain.”

Negative results might bring many other legal actions for developers involved with the digital coin’s activity.

One of the litigated developers claimed that he hasn’t made a Bitcoin Core code contribution “in ages”. “Even if Bitcoin was centralized, I wouldn’t be on the list. I just don’t have any special control over Bitcoin.”, he said after receiving the suit.

“Wright is probably suing for what’s ultimately PR reasons. Most likely because they’re trying to convince others that they’ll win, to get more money out of them somehow. Shutting up is good from a legal perspective. But it also makes it easier for Wright to scam others.”

-Peter Todd, developer

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Bitcoin trading at $41,310 in the daily chart | Source: BTCUSD on

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