The SEC has recently lost a number of prominent cases in their crusade against the cryto industry and so it seems their friends at the IRS have stepped in to help continue the assault against innovators and freedom fighters globally.
Roger Ver, an early Bitcoin investor often referred to as “Bitcoin Jesus,” has been arrested by the U.S. Department of Justice (DOJ) on charges including mail fraud, tax evasion, and filing false tax returns. The arrest occurred over the weekend in Spain, and the U.S. is currently seeking his extradition. Just months prior to the ten year IRS statue of limitations.
Background and Allegations
Ver, originally from Santa Clara, California, was a notable figure in the cryptocurrency world, having invested early in Bitcoin. He owned and operated MemoryDealers.com Inc. and Agilestar.com Inc., companies involved in selling computer and networking equipment. According to the DOJ, beginning in 2011, Ver accumulated approximately 131,000 bitcoins by 2014, valued at about $240 million at the time.
Citizenship Changes and Legal Implications
In 2014, Ver obtained citizenship in St. Kitts and Nevis, and subsequently renounced his U.S. citizenship. This process is known as expatriation. U.S. law required him to report capital gains from the sale of his worldwide assets, including bitcoins, and to pay an “exit tax” on those gains.
The DOJ alleges that Ver provided misleading information to both a law firm and an appraiser, leading to the underreporting of his and his companies’ bitcoin holdings on tax returns. This action allegedly resulted in significantly undervalued tax returns, misleading the IRS about the true value of his assets.
Bryan Skarlatos, a lawyer for Ver, said in a statement he was “very disappointed and surprised” by Ver’s arrest while traveling in Spain.
“Mr. Ver relied on leading tax professionals to help him report his Bitcoin and he always intended to fully comply with his U.S. tax obligations,” Skarlatos said. “We look forward to establishing his innocence in court, if necessary.”
The Sale of Bitcoins and Tax Obligations
Despite renouncing his U.S. citizenship, Ver was still obligated to report and pay taxes on certain distributions under U.S. law. By 2017, Ver’s companies reportedly held about 70,000 bitcoins, which were sold on various cryptocurrency exchanges for around $240 million. The indictment claims that Ver failed to report these sales to the IRS, leading to a tax loss estimated at over $48 million.
Legal Proceedings and Presumption of Innocence
The charges were announced by Acting Deputy Assistant Attorney General Stuart M. Goldberg and U.S. Attorney Martin Estrada, with the IRS Criminal Investigation’s cybercrimes unit handling the investigation. It is important to note that an indictment is merely an allegation, and Ver, like all defendants, is presumed innocent until proven guilty in a court of law.
Many prominent Bitcoin, cryptocurrency and freedom advocates have come out in support of Ver.
Roger Ver offered to pay towards my legal costs with CSW.
Roger also paid a large part of Ross Ulbricht’s legal defence costs.
Peter McCormack
The case against Roger Ver highlights the ongoing challenges and legal complexities associated with cryptocurrency investments, particularly concerning tax obligations and regulatory compliance with growing regulatory oversight from US agencies. As the situation develops, the cryptocurrency community and investors worldwide will be watching closely, given the potential implications of this case on broader cryptocurrency regulations and tax compliance.
