Dorian Nakamoto Wants To Sue Newsweek — But It Seems Unlikely To Succeed And Could Cause More Problems For Him

Defamation

from the freedom-of-the-press-isn't-always-pretty dept

As you may recall, earlier this year, Newsweek “relaunched” with a cover story by reporter Leah McGrath Goodman claiming to have unmasked the real creator of Bitcoin. Bitcoin was created by someone (or some people) using the name Satoshi Nakamoto, but no one knew who it really was, and over the past few years Nakamoto had more or less disappeared from the Bitcoin scene. Newsweek claimed that Nakamoto was really a person named Satoshi Nakamoto, who actually goes by the name Dorian Nakamoto. The article was weakly sourced, heavy on speculation and based its key arguments on some really clueless assumptions. The most ridiculous parts involved the “forensic analysis” that Newsweek supposedly relied on in identifying Nakamoto. Specifically, this “forensic analyst” looked at the original Bitcoin paper and noted what she said were “old-school technological tropes” — specifically, discussions about saving disk space, mentioning Moore’s Law, and the use of two spaces after a period. This, according to Newsweek, pointed to a much older engineer:

“The idea of conserving any kind of resources, and this is part of my formation, my long background in systems testing, that was a critical issue. But those are very very old-time concerns,” she said. “To even mention disk space, things like that ? disk space is cheap! And Moore’s Law is an old maxim that computing power will double. We’ve gone exponentially away from Moore’s law, but that was what it was all about in that interim period.”

Except that while disk space is cheap, the size of the Bitcoin blockchain is a big deal since the whole basis of Bitcoin relies on an ever growing blockchain, and if you didn’t figure out ways to minimize the need to redownload the entire blockchain, it would create a massive problem for Bitcoin. The concerns about space weren’t archaic at all, but right on point. As for the claim that “we’ve gone exponentially away from Moore’s law”? I mean, that’s just flat out wrong.

Either way, it became pretty clear pretty quickly that Dorian Nakamoto wasn’t Satoshi Nakamoto — though Newsweek (bizarrely) still stands by its story. The latest, however is that Dorian Nakamoto has launched a crowdfunding effort to sue Newsweek on a website called NewsweekLied (and for those wondering, Nakamoto’s lawyer has confirmed the page is legit).

I sympathize with Nakamoto, having his life shaken up by a shoddy reporting job, plucking him out of obscurity and incorrectly naming him as the creator of Bitcoin. But… I have a lot of trouble seeing how any lawsuit could possibly make sense. In fact, it seems likely that any lawsuit could actually make things worse for Dorian Nakamoto. From the details on the website, it appears that they’re likely to use a combination of false light and defamation claims. Both would be pretty difficult to prove, though false light is perhaps a lower bar in this case. The real problem, though, is that most of what is in the article could be considered to reflect positively on Nakamoto, rather than negatively. Claiming he was a secret, if eccentric, creator of a global cryptographic currency phenomenon? Even if it’s false (as it appears to be), how would that be “highly offensive to a reasonable person” as required under California law?

As for a defamation claim, they probably wouldn’t have to show “actual malice” since Nakamoto wasn’t a public figure (though, potentially Newsweek would argue that the Nakamoto they thought they were identifying was a public figure, and thus the higher bar should apply), but they would still have to show the harm to Nakamoto’s reputation, leading to the same problem as the false light issue.

Also, Nakamoto’s lawyers would likely have to show that Newsweek knew the story was wrong (which doesn’t appear to be the case) or that it was “negligent” in reporting the story. While I think we agree that Newsweek was sloppy and there was just generally bad reporting and bad conclusions involved, to reach the level of negligence is not easy.

And here’s where it gets even more difficult for Nakamoto. As we’ve discussed many times in the past, California (thankfully!) has a strong anti-SLAPP law that protects publishers from being sued in an attempt to silence their reporting on issues of public interest. We’re big fans of California’s anti-SLAPP laws and you’d have to imagine that Newsweek would seek to be protected under that law. And, the bigger issue for Nakamoto is that under California’s anti-SLAPP law, if Newsweek were to win, it can go after Nakamoto for its legal fees. And, the law actually would allow Newsweek to go even further, and file a SLAPPback lawsuit, to seek compensatory and punitive damages (though, that might be a longshot for Newsweek).

As ridiculous as the original article was, and as sympathetic as I may be to Dorian Nakamoto’s situation, it’s difficult to see how his lawsuit has much of a chance. Conceivably, there could be other claims made, or additional evidence that Nakamoto’s lawyers think they have on Newsweek, but it seems like a massive longshot and a situation that could potentially create more legal headaches for Nakamoto than it solves.

Filed Under: anti-slapp, bitcoin, california, defamation, dorian nakamoto, false light, inventor, leah mcgrath goodman, satoshi nakamoto, slapp
Companies: newsweek