The most recent development is an indictment with a long list of charges against Roger Ver, a well-known activist in Bitcoin, including using the mail to defraud, evading taxes, and making false tax returns. Ver is infamously known as “Bitcoin Jesus” in the cryptocurrency world for his deterministic backing and active engagement in Bitcoin from the early stages. He was arrested a few days ago in Spain and is now awaiting extradition to the United States for his coming trial on these offenses.
Allegations against Ver are related to his business activities through these two companies, MemoryDealers.com Inc. and Agilestar.com Inc., which specialize in computer and network equipment. Based on the charges, since 2011, Ver has been an avid Bitcoin user and promoter, whether it is for himself or through his businesses.
Remarkably, on February 4, 2014, he was granted St. Kitts and Nevis citizenship, and he voluntarily gave up his U.S. citizenship, which is a process known as expatriation. Another part of this process was to file U.S. tax returns that revealed any capital gains that came from the sale of his worldwide assets, including Bitcoin, at its fair market value at the time of exile.
In line with the legal regulations, Ver had to pay the amount of tax due when he renounced his citizenship. This tax, which was charged solely on profits from investment, is called capital gain. By giving up his citizenship, Ver was said to own 131,000 bitcoins being, at $871 per each bitcoin. These 73,000 coins were owned by Agilestar and MemoryDealers, respectively.
With his impending move to a foreign country, it is said that Vér contacted a legal counsellor and an appraiser to set the worth of his things and to know taxes. However, the charges leveled against him indicate that he might have provided misleading or false details to these experts and informed them that his Bitcoin holdings were much lesser than what he had.
Adding to the collaboration, it was documented that as of June 2017, Ver’s companies possessed approximately 70,000 bitcoins. In November of the previous year, he allegedly penetrated Bitfinex’s wallets and sold over 50,000 units on various exchanges with a net amount of $240 million. This action was undertaken despite his giving up their U.S. citizenship. Such action was against the U.S. regulations. The regulations stated that all foreign distributions from his businesses on American soil were chargeable.
Ver is accused in the indictment of a deliberate act of devotion of hiding the fact that he now made personal profits from the sale of Bitcoins with the facilitation of his accountant. In completing his, among other things, tax returns in 2017, he allegedly did not reveal any profit or taxes owed from these transactions. These steps have led to a loss of at least $48 million due to the Internal Revenue Service.
The case provides a good illustration of the increasing attention being paid to transactions carried out with the help of cryptos and their compliance with the regulation of the U.S. tax code. The cybercrimes department of the IRS Criminal Investigation is the locomotive of the operation. Assistant Chief Matthew J. Kluge from the Tax Division of the Department of Justice, Trial Attorney Peter J. Anthony, and Assistant United States Attorney James C. Hughes for California are handling the legal hearings.
It is important to remember that Ver is deemed innocent unless and until he is proven guilty beyond a reasonable doubt in a court of law. The official charge of the offense, an indictment, has been released. Each phase of the case will be closely watched, given the complex dynamic between the new digital currencies and the regulatory system in place.