Introduction

We recently took the time to lay out a factual timeline of Craig Wright’s involvement with Bitcoin using publicly available information. While the list is not exhaustive, the bulk of information comes starting in 2014 as everything prior to that date has been scrubbed from the internet. When digging in to try and fill in the gaps between 2009–2013, you find a long and bitter battle between Wright and the Australian Tax Office. The BBC first asked Wright about his dealings with the ATO in his famous interview around May 2016. Here is his response:

I have companies that are under audit. The reason for that is that we have told the ATO everything. We have told them about the tax issues and implications. We actually put in everything with the auditors… We had an internal audit and we supplied that to the tax office so that we could pay the correct amount of tax. And because no one really understands Bitcoin very well, and no one understands the timing or anything like that, then it’s still an ongoing matter.

While many news organizations have used Wright’s dealings with the ATO to make accusations of “fraud”, an examination of the facts and evidence paints a different story. We have obtained private documents that contradict the prevailing narratives about Wright’s history and dealings with the Australian Tax Office:

Wright‘s saga with the ATO dates back as early as the 2009 tax season. Wright was working with the Australian Tax Office to properly report tax on his Bitcoin businesses. Questions are raised about the Australian Tax Office’s handling of the various audits against Wright’s companies — specifically forensic analysis suggests fraudulent documents were used as evidence against Wright and a large security vulnerability existed in the ATO’s networks allowing modification and altering of records.

Background

As part of Wired/Gizmodo’s initial doxxing of Craig Wright, a leaked 2014 transcript between the Australian Tax Office and Craig Wright and his legal team gave us a glimpse into the long saga between Craig Wright’s various business dealings and the ATO. This document is authentic and is cited as evidence in the current lawsuit between Ira Kleiman and Craig Wright. In this transcript we are given some key insight into the various audits Craig Wright’s companies underwent as a result of his Bitcoin businesses dating back to 2009. Two days prior to the date of the transcript, Investor Daily reported that Wright was working with the ATO to “have a full banking licence from APRA based on Bitcoin” with his company Hotwire PE. The transcript shows that this was not Wright’s first experience with the Australian Tax Office surrounding his Bitcoin businesses, and specifically that he “gained a little bit of paranoia” from his prior experience with the ATO “in 2010 or whatever it was”:

In working to obtain information about this previous interaction, we have obtained exclusive documents showing Wright’s initial 2011 objection decision against an amended assessment for the tax year ending 30 June 2009. The audit for the 2008–2009 income tax year was commenced on 10 February 2010.

The document details that Wright “purportedly sold [his] personal intellectual property to Information Defense and Integyrs”, two of Wright’s companies.

Information Defense was created on 29 January 2009, 19 days after the mining of the first Bitcoin block, and the domain information-defense.com was registered on 23 January 2009. The domain for Integyrs.com was registered on 25 April 2009.

It’s noteworthy that Wright’s initial tax return claimed a net capital gains upon which he would have owed taxes — refuting many claims that Wright was trying to get money out of the Australian Tax Office. After audit, the ATO took up issues with Wright’s claimed deductions to which he filed an objection. While the objection was initially disallowed, the objection decision was later reversed (as shown in another document dated 11 February 2013) and the deductions were finally granted to Wright. It is noted that “the Tribunal is requested to note that this decision is in favour of the Applicant”:

The 2 year delay in approving Wright’s initial tax return for the 2009 tax season outlines the troubles Wright had in running his companies while under audits that he viewed as invasive and unfair. In the 2014 meeting he presciently tells the auditors “I did my best to try and hide the fact that I’ve been running bitcoin since 2009 but… by the end of this I think half the world is going to bloody know.”

During the middle of this audit in an alleged email between Craig Wright and Dave Kleiman dated 22 May 2012, Wright expresses frustration with the ATO’s “BS’ing” where he guesses “that they want to get a result out of attrition rather than honesty” and that “they will drain all I have if they can”. Wright continues venting his frustrations saying “They lost evidence and use my temper against me. I hate their lies. I did everything right and I am STILL punished.”

Craig’s aforementioned paranoia is on display in the early parts of the February 2014 meeting when Wright identifies that a private ruling issued by the ATO on 30 September 2013 was actually issued on 29 November 2013 and backdated. The backdating of the ruling was only discovered once Wright went to Internal Fraud and Investigations and had the authorization number investigated. Des McMaster, one of the auditors, shows frustration that Wright had obtained this information:

February 2014 Transcript between Wright and the ATO

To add on to the dispute, Wright and his attorneys asserted that they had not received notice of the ruling