Reported Bitcoin 'founder' Craig Wright's home raided by Australian police
theguardian.com
theguardian.com
> Guardian Australia understands the raids are not related to the claims that Wright may have been involved in the creation of bitcoin, but are related to an Australian Tax Office investigation.
So the story is that the Australian Tax Office just happened to be running an investigation looking into some facet of Craig Wright's finances. An investigation that apparently revealed some sort of abnormality, resulting in a raid on a property connected to Mr. Wright...
...18 hours after a major technology publication "outed" him as the possible person behind "Satoshi Nakamoto".
Welp, that looks completely coincidental to me. /s
If that's what happened perhaps they were moving quickly to preserve evidence of whatever else they were investigating in advance of the hordes of people on their way to break into the house and steal whatever computer hardware they could find hoping to gain access to the "Satoshi's Stash" bitcoins.
---
EDIT: Too funny... I posted this and then saw another comment (https://news.ycombinator.com/item?id=10702038) by imron (https://news.ycombinator.com/user?id=imron) posted before mine that described almost the exact same conclusion (nearly word for word). Props to them for beating me to the punch!
Great minds think alike! ;-)
Not sure if the above makes sense. The two are probably related.
The guy seeing an opportunity and possibly having some early coins declared himself to tax office as Satoshi, but maybe claimed he lost keys to majority of coins. He then proceeded to have one of his companies claim tax back for R&D of bitcoin. The whole thing probably backfired then.
I understand that he was planning to leave the country in January. Movers had been to his rented home in Gordon, Sydney and have removed much of his furniture.
I assume that the Tax Office did not want their target to flee with all the evidence that they wanted to lay their hands on.
The original gizmodo[0] piece has more on this:
The hacker-tipster also included multiple PDF files that contain what appear to be a transcript of a meeting about Bitcoin regulation between Wright, his attorney, and the Australian Taxation Office (ATO), as well as the minutes of a subsequent meeting of the ATO and Wright’s attorney. Wright appears to have been trying to persuade the Australian government to treat his Bitcoin holdings as currency, as opposed to an asset subject to greater taxation. Without this regulatory move, his business interests would be scuttled. During an interlude in one such meeting, Wright makes an oddly casual admission of his identity as Satoshi (highlighting added):
A request to confirm the authenticity of the document sent to Auscript, the transcription service whose logo appears at the top of the file, was denied on the basis of company policy. A request sent to the ATO was also denied on the basis of state confidentiality.
[0] http://gizmodo.com/this-australian-says-he-and-his-dead-frie...
I speculate this tax ruling and the ongoing investigation was also the reason why he wanted to migrate to the UK soon. The article has probably given the ATO reason to believe that he is under flight-risk.
"Silicone" Valley? "Assumed to the centre of everything"?
Color me skeptical that this guy is Satoshi.
(source: https://twitter.com/kashhill/status/674393417019883520 )
Exhibit A (https://bitcoin.org/bitcoin.pdf)
This paper, and the technology it proposes, are as eloquent and ingenious as they come.
Exhibit B (from one of Wright's blog posts in the Wired exposé) "Well.. e-gold is down the toilet."
The telltale 2 dot ellipsis... Imagining this semi-literate blowhard writing that paper is a real stretch.
Why oh why can't journalists just respect his wishes!
"People love my secret identity and hate me."
It certainly seems that the Australian police aren't on particularly good terms with him at the moment.
If the Australian government takes control of the Tulip Trust bitcoin stash, the world has to deal with a cryptocurrency being managed by politicians.
Whoever gets them, I hope that the bitcoins remain off the market until at least 2020 as Kleiman wanted.
Which makes me think - could the bitcoins from Kleiman be considered "inherited", and thus subject to inheritance regulations?
Another hypothetical thought: when the original bitcoin creator mined the first bitcoins, they were worthless. They only gain value if someone else projects value onto them. They're not being used. Imagine they're a form of trading derivative (e.g. stock options): the right to trade in future. Are those taxed? Anyhow, it seems very complicated, and confiscating personal computers with a whole host of other files seems extreme.
Generally yes, although I don't know about Australia. In the UK it's called capital gains tax.
I wouldn't have thought just holding bitcoins would be grounds for taxation.
If you have any capital assets each year their value will be recalculated and compared to last's year calculations (some assets maybe calculated on a quarterly basis) the taxable value is then adjusted for any capital gains or loss that was carried from previous years and the final amount is calculated so you get a tax invoice "your GC tax for year 2015-2016 is X).
You can pay that tax immediately or you can choose to carry it on depending on the tax law and assets you might have to pay a certain amount immediately you might also be allowed to carry the tax to the next year which also might incur a certain payment/tax on it's own.
If the tax law allows you to carry on loss or gains to following years there's usually a limit to this (e.g. you have to pay the tax every 5 or 7 years to be able to do that) different types of assets will also have different regulation regarding deferring tax payments e.g. directly tradable/liquid assets like bonds might now grant you deferral on yearly GC tax while non-liquid assets like property which requires registration and tax duty to transfer will.
Considering that Australia most likely has laws which will be quite similar to those of the UK (As it only achieved final independence in 1942 or well technically 1986 ;)) there is a good chance that the capital gains tax on BC should've been paid every year, and even if it wasn't and you could deffer payments you had to declare it and submit it for valuation each year for tax purposes because otherwise GC tax cannot be calculated. So no matter what was the value of BC when he made it if he didn't declare it properly especially after it was defined as taxable assets in Australia he violated the law, given his at least presumed intelligence (regardless if he's Satoshi or not) and the actions he so far has taken this was done quite knowingly and intentionally.
Because it's their job not to. Lots of people don't want to be found but it's in the public interest to find them.
I'd argue the same goes for the creator of Bitcoin. It's in the public interest to find this person and see what they stand to gain from Bitcoin's continued use and value, and what they are likely to do with the money. You will respond that it doesn't matter, but it does.
What if Bitcoin came from Iran's secret service and it will be used to fund an enrichment facility?
What if it came from a drug lord?
What if it came from Michael Bay and he's going to make yet another Transformers movie with it?
All of these are in the public interest to find out and make people reconsider their adoption of it.
A decision void of context is necessarily an ignorant decision.
Who cares? What's important is whether knives are useful to us or not. If the inventor is a drug lord, then the problem is that he is a drug lord, not that he invented knives.
If someone invents something useful, then he should be rewarded, independently of whether he then uses the resulting money to save starving children or to buy Doritos all to himself.
If he does something illegal with that money, then we should come after him because he did something illegal, not because he was able to do something illegal (because he had earned a lot of money).
The point is if we know he's a bad person, we can choose not to use Bitcoin as is, and instead use a fork of it where he doesn't profit from it.
Also stop with the myth that Bitcoin was completely invented by one guy. It was based upon ideas from a lot of people prior to Satoshi. If there's a moral obligation to reward him (there is not) then there's a moral obligation to reward all of them as well (there still isn't.)
Why? To bring their stash of bitcoins public via rubber hose cryptography?
> Iran... Michael Bay... drug lord...
None of these are very likely. It's much more likely that it is some reclusive technical genius who realizes that the release of their identity can have nothing but a negative impact on their lives. The chances are remarkably good that they would end up getting killed (or thrown in some state actor's prison) for their coins once their identity is revealed.
This kind of outcome isn't in anyone's interest.
Care to expand on that? Where is the limit on Outing someone, when does it become doxing?
That this guy was looking to move to the UK, where banks have been quite wary of bitcoin, (although the bank of england has not) is another strike against him being Satoshi. I would assume that anyone who was holding as much btc as we think satoshi has, and with this individual in particular in some sort of tax related issues, he would have been aware of german tax law and would seek to relocate there. Perhaps he was thinking of going from UK to Germany in time for 2020 when the Tulip fund would have been accessible.
I guess the point being given that be is not satoshi nakamoto because if he was he would have been a lot more organised than it seems he has been.
Wired better be able to back it up.
Obviously. It's okay to make money off of things that are helpful or at least harmless. Not okay to make money off of hurting innocent people.
> At least this is actual news if it's true and not mindless reprints of known information.
So what? Facts are not inherently virtuous. If I published a report on your intimate personal habits, would you feel better if everything in the report was true?
I hadn't had the chance to read the article until now, and it's nothing like the Newsweek "expose."
"Under the scheme, a company which turns over less than $20 million is eligible to apply for a cash rebate of 45 cents for every dollar spent on research and development activity.
According to a press release in May, 2015, DeMorgan Ltd succeeded in its application for the rebate.
That means DeMorgan were able to prove to AusIndustry that it had spent $120 million on R&D activities in the 2014/2015 financial year, all while turning over less than $20 million. A 45 cent rebate on $120 million works out to $54 million."
The credit from the ATO comes in the form of a check, but it's a prepayment against future tax obligations (you lost the tax-loss carry-forward you'd otherwise be able to claim to offset future profits). It's very useful for a startup since it's non-dilutive funding which can be used to get a lot of work done.
However add a little complexity here or there and it helps to have someone who knows what they're doing to guide you through it. Its a self assessment scheme, like tax, anyone can lodge their own return and the ATO will pay out with only cursory checks.
The real danger lies when you get audited, it can be especially dangerous for startups who have been claiming a few years, ignorant that they have not been claiming properly and are faced with an Audit by the ATO for multiple years of tax refunds. Generally once you add penalties to the tax refunds they must now pay back, the amount will end most startups.
There are many reputable consultants in this space who are capable and cheaper than the big 4. I would suggest sticking to the big 4, Tier 2 Accounting firms and Boutique R&D Tax Firms. They should be registered tax agents and generally you would want to know if they have successfully navigated Ausindustry Reviews and ATO audits before. Avoid suburban accountants like the plague for these things.
$120million in software R&D is a very large spend in Australia for one year, Google Australia for example claims about $40-$50million in R&D spend each year. Atlassian and some of the larger banks would claim a similar amount. I have not heard much about DeMorgan before, however if it all checks out they would be one of the most significant powers in the Australian tech space.
The "We create tax refunds" part of your homepage says that a company can get a tax refund even if there is no sales.
Does this mean that if I establish a company tomorrow, invest $100k of capital, and spent $100k of capital on R&D, then the ATO will give my company $45k?
They'd need to pay 30% tax on their income, leaving a net outlay by the government of $15k (15%) overall.
I paid $100k, the provider took the $100k and spent $60k. This means they declare $40k income.
The company pays $12k tax.
The Goverment gives $55k to my hypothetical company.
It is one area that Australia has a significant advantage over the US for startups.
Cheers, Andrew
As far as I can tell, you're bullying gwern. Please stop.
If you have a point, then make it clearly. Leave out speculation about "what would happen if it was a US no-knock raid."
What, precisely, did gwern do? Their replies address your points, from where I'm sitting. What am I missing here?
>What, precisely, did gwern do?
Publicly accused someone of being Satoshi Nakamoto, which is quote serious, and predictably would have negative consequences.
It's especially bad if you do it with unreliable evidence, because then it's just some poor unrelated person.
The situation is just confusing. Help me understand what's going on here. If part of that article is unsubstantiated, then everyone would be interested in that.
I chose my words carefully. What, precisely, did gwern do? Describe their actions as if your Reddit link didn't exist.
Are you upset about the contents of that IRC transcript? Because gwern already said that had nothing to do with the investigation, and I believe them. They mention the Internet Archive as one way of verifying the authenticity of various internet posts / timestamps, for example.
Perhaps what's going on here is that bitcoin enthusiasts are upset that Satoshi may have been identified.
Listen, I believe in the principle of charity. I know you're smart, so there's something that I'm missing here. But you haven't described specific things that you believe should tank gwern's reputation. Again: What specifically are you upset with? Those signatures have nothing to do with the investigation. So I'd like to understand what else there is.
I also chose my words carefully. I pointed out that he was involved in making this accusation. He used faulty reasoning from poor misevidence to draw a conclusion that can bring tremendous harm to others. Article states his involvement, plus private correspondence of ~30 days of work on this article, plus I have known him for years and we talk about Satoshi speculation a bunch thus how I know that he has actually looked at the misevidence. I suppose the other issue is that he's from the "lesswrong" community which claims to be better at reasoning, but the only kind of reasoning that would be complicit with glossing over such substantially useless "evidence" is ... motivated reasoning.
> Perhaps what's going on here is that bitcoin enthusiasts are upset that Satoshi may have been identified.
Nah, I am just as curious as anyone else. I also know that finding Satoshi 4realz is going to bring tremendous danger to whoever that person was.
There is no evidence Gwern "called in" a raid. The Australian Federal Police deny that the raid had any connection to recent media reports, and say the timing was a coincidence: http://www.dailytelegraph.com.au/news/bitcoin-mystery-home-o...
For example, these pgp signed emails are signed with the key with short ID 5EB7CB21 which is not the well known key, does not exist in old keyserver dumps, and has a pref-hash-algos list of "8 2 9 10 11", which is the list that GNUPG started generating a year (commit e50cac1d848d332c4dbf49d5f705d3cbbf074ba1) after the date on the key. The well known key, which the new key claims to be generated within 24 hours of, has "2 8 3" which was an the prior list of hashes.
Does gwern's reply on Reddit address what you just wrote?
And as I pointed out in my subsequent replies which you have left out, I am perfectly aware that PGP public key metadata (not pgp.mit.edu timestamps, since the keyservers are only reading what the keys say!) can be backdated at creation, and this is why we put our effort into nailing down the creation and modification dates of the blog post in third-party archives like the IA and Google Reader.
Our case was not based on the key creation dates and it is bullshit for you to imply that it was or that their unreliability torpedoes the article.
Can you point out which part of the gizmodo or wired articles were based on mistaken evidence from gwern's investigation?
What is more likely: Someone who is Bitcoin's creator in hiding, went and created a pile of provably falsified information that they were Bitcoin's creator, plus left some circumstantial evidence that can't be decided .... Or someone who _wasn't_ Bitcoin's creator, went and created false evidence and had some circumstantial evidence by chance (or falsified too but not proven yet)?
In any case the complaint isn't even so much about this particular drama-fest, it's about the repeated behavior. This time it looks like it may have precipitated a raid on someones house (otherwise the timing is more coincidental than most of this evidence), had it been in some places in the US perhaps the victim (or at least their dog) wouldn't even be alive now.
Not with this degree of certainty.
Such as your public and forceful "rebuking", in an authoritarian manner, of the then revelations, with evidence, that gox had 200k btc, which latter of course was shown to be true and showed that you were in no way rebuking anything, but abusing your position.
One would think you would have learned and keep your mouth until the dust is settled and you are in a better position to judge, but it seems that you like far too much making authoritarian, seemingly conclusive when not warranted, proclamations instead.
That is not to say, of course, that this guy may not be satoshi, but I'd take care hours after the announcement especially if I was in your position.
Now I can understand that there is a public interest component in knowing SN's identity. And I'd even be willing to accept (but really only for sake of argument) that this public interest overrides SN's own right to privacy and safety.
But to make these accusations when you yourself admit - as the article does - that there is a substantial degree of doubt, is to put at risk the safety and privacy of a person who doesn't deserve it in the least.
This is an absolutely appalling thing to do to anyone. And it should be prima-facie obvious to you as to why.
While I don't condone bullying of any sort - it really is the least of what these authors deserve. I personally don't feel Kanzure is bullying - merely pointing out how appalling this behaviour is, and this absolutely needs to be pointed out.
> "gwern's gonna get doxxed and left for dead"
Quoted to create an enduring record in case the comment is edited. Kanzure, you should probably step back and reconsider what you're doing here.
It seems like when you put everything together that Craig Steven Wright + Dave Kleiman + unknown associates = Satoshi. This honestly seems like a much simpler conclusion to me than the alternative which is that someone (whether a group or a person) went to the trouble of concocting extremely elaborate and convincing evidence for the purpose of framing Wright as Satoshi.
Hopefully the media didn't out the wrong guy this time (although in retrospect: I'm not even sure why Gwern thought it wise to send the leaks to the press. I would have thought that he would sympathize with Satoshi wanting to stay anonymous given that he writes under a pseudonym himself...)
Perhaps the ATO felt they need to move quickly when news broke out (suggesting he is the BitCoin creator), to secure his assets before they are transferred / moved.
And it looks like the ATO doesn't doubt that either and wants to protect evidence from its ongoing investigation.
Seems like a hell of a coincidence for these two things to happen on the same day...
This could be some guy feigning humblebragging to fool prospective customers, or the vaguest individual Wired decided to hoist the label onto because it garners eyeballs in a Daily Mail way that's hard to repute.
The raid is explained because many governments want evidence for tax evasion and evading the conventional banking system... control SN = control BTC.
No one is that afraid of the bitcoin community, or of bitcoin itself. The bitcoin fringe is only novel in their application of the blockchain towards the problem of reducing the risk in organized crime. The world has heard the anarchist, anti-bank rhetoric before, and for that matter, from groups that actually blow up banks and murder people to further their goals.
There seems to be no evidence of any government seeking to "destroy bitcoin in any way possible." One would expect there to be fewer bitcoin based companies openly operating if that were the case. Rather, it appears that governments have reacted to bitcoin by defining it in terms of their existing regulatory frameworks, and deciding whether or not, and how, it can legally be used and taxed.
So yes, it does seem a bit ludicrous.
It's a decentralized, open-source protocol. SN couldn't do anything to it if he wanted to.
Then these new claims are made in the media and they risk not only Wright himself moving the evidence, but also hordes of potential 'treasure hunters' breaking in and stealing things like hard drives in the hope of finding bitcoin - hard drives that also contain things the ATO might want to look at.
And so a pre-emptive raid to take the evidence, before it gets taken by others.
You're making very ambitious assumptions that the tax raid is related to the rules that were drafted 12 months ago.
I'd bet significant sums of money that he isn't in trouble for creating bitcoin. Its more likely to be some other action he has done, possibly with bitcoin.
Since this story contains significant new information, it doesn't count as a duplicate.
How can anyone watch this video and not see that it's a braggart looking for some fame?
I'll bet that the story here will turn out to be that he's built a backstory around being Satoshi in either an attempt to get famous, or some fraudulent scheme to profit from it.
On reading the tax stuff, I'm wondering if he's told the Australian Tax authorities that he is Satoshi.
could be australia, no? probably the deadzone is a bigger tell than where he posted. Ostralia is about UTC +10h? no posts between 4 and 8am is believable.
I bet that whatever this raid is about, it's about something like R&D tax credits again (http://www.businessinsider.com.au/the-australian-who-may-hav... says $54 million in 2015 alone!) or some sort of VAT rebate, and it may kill another of Wright's companies. There's not much you can do against the ATO if they are determined to reach an adverse decision against you... But if he's Satoshi, he can take the moral high ground and wage a media campaign to shame the ATO into dropping the case and maybe finally correctly treating Bitcoin as money.
How does this help? If they treat it that way, wouldn't Wright have a huge income tax debt?
Yes, but presumably he can pay it out of his Bitcoin fortune. He has to deal with that at some point anyway, and by going public now, he gains additional leverage on his VAT or tax credit or whatever the ATO has decided to get him for this time.
Thereby tanking the price of Bitcoin, and his fortune. Though on the bright side, a smaller fortune will mean smaller taxes.
Typically tax on volatile income is paid when you "cash out" to a more stable currency.
This said, this is horrible for Craig Wright if he is innocent...
I don't know if there are other crimes for which they intend to charge him, but that's the first one that pops to mind.
Also, they've obviously had meetings in advance of "what do we do if we determine the identity of Satoshi", because this raid was FAST.
From the article:
"Guardian Australia understands the raids are not related to the claims that Wright may have been involved in the creation of bitcoin, but are related to an Australian Tax Office investigation."