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Calif. man denies he's Bitcoin founder after Newsweek report

  • Bitcoin Founder Nakamato.jpg

    March 6, 2014: Dorian S. Nakamoto, the man that Newsweek claims is the founder of Bitcoin, denies he had anything to do with it and says he had never even heard of the digital currency until his son told him he had been contacted by a reporter three weeks ago. (AP Photo/Damian Dovarganes)

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    Bitcoin tokens seen in Sandy, Utah. (AP Photo/Rick Bowmer)

A 64-year-old Japanese-American man is vehemently denying any connection to bitcoin, despite a Newsweek cover story identifying him as the brains behind the bits. 

‎Dorian S. Nakamoto, whom Newsweek identifies by his given name, Satoshi Nakamoto, told the Associated Press he has nothing to do with the bitcoin, a digital currency that has no physical form and lacks any ties to a country. Bitcoin is also wildly successful, as far as currencies go, with everyone from football teams to food shops announcing plans to accept the digital currency.

Reached at his home in Temple City, Calif., Nakamoto acknowledged that many of the details in Newsweek's report are correct, including that he once worked for a defense contractor. But he strongly disputes the magazine's assertion that he is "the face behind bitcoin."

Widely circulated stories have said in the past a genius kid in Tokyo came up with the concept. Not so, writes Leah McGrath Goodman in a cover story for the recently re-launched Newsweek magazine.

'I am no longer involved in that and I cannot discuss it. It's been turned over to other people.'

- Satoshi Nakamoto

“Far from leading to a Tokyo-based whiz kid using the name ‘Satoshi Nakamoto’ as a cipher or pseudonym (a story repeated by everyone from Bitcoin's rabid fans to The New Yorker), the trail followed by Newsweek led to a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto. He is someone with a penchant for collecting model trains and a career shrouded in secrecy, having done classified work for major corporations and the U.S. military,” Goodman wrote.

Nakamoto, who lives in the foothills of Los Angeles, called the cops on Goodman when she showed up at his door.

"I am no longer involved in that and I cannot discuss it," he said, according to Goodman. "It's been turned over to other people. They are in charge of it now. I no longer have any connection."

Nakamoto graduated from California State Polytechnic University in Pomona, Calif., with a degree in physics, but Newsweek found him through his interest in model trains -- which he upgrades and modifies through computer-aided design (CAD). He lives in a “modest, single-family home in Southern California” and drives a silver Toyota Corolla CE, Goodman wrote -- and is worth an estimated $400 million.

In bitcoins. Of course.

That wealth may not last long. Mt. Gox, a Japanese company that is the world’s largest exchange of bitcoins, filed for bankruptcy protection at the end of February, announcing a massive theft of several hundred million dollars worth of the digital currency.

The bitcoin market had been tumultuous before that, with massive fluctuations in price driving exchange rates up and down by tens or even hundreds of dollars per day. The stress of the industry may be one reason 28-year-old Autumn Ratke, CEO of U.S.-based bitcoin exchange First Meta, committed suicide recently.

The explosion in popularity of the coin made reported early investors like Nakamoto instantly wealthy. Goodman interviewed Bitcoin's chief scientist, the 47-year-old Gavin Andresen. Another early investor, he has done well by bitcoins.

"I made a small investment in bitcoin and it is actually enough that I could now retire if I wanted to," Andresen told Newsweek. "Overall, I've made about $800 per penny I've invested. It's insane."

Nakamoto has been reluctant to spend his fortune, Goodman wrote -- money his family could use. The reason might be simple: He does not want to participate in the bitcoin madness, she noted.

“If you come out as the leader of bitcoin, now you have to make appearances and presentations and comments to the press and that didn't really fit with Satoshi's personality," Andresen told Newsweek.

The Associated Press contributed to this report