Regulation
US sues early Bitcoin supporters for $48 million tax evasion
Roger Ver, also known as “Bitcoin Jesus” due to his early and enthusiastic support of Bitcoin, is now facing serious legal difficulties. A recent indictment accuses him of mail fraud, tax evasion and filing false tax returns.
Following the revelation of these accusations, Spanish authorities arrested Ver and the United States is now seeking his extradition.
Why Roger Ver is facing Bitcoin tax evasion allegations
Formerly a resident of Santa Clara, California, Ver owned MemoryDealers.com Inc. and Agilestar.com Inc., which sold computer and networking hardware. He started acquire Bitcoin for personal and professional purposes around 2011.
However, his legal problems intensified after he renounced his US citizenship in 2014, following the acquisition of citizenship of Saint Kitts and Nevis. Therefore, he had to report capital gains on his global assets, including 131,000 Bitcoins, valued at approximately $871 each at that time.
Learn more: The Ultimate Tax Guide to US Cryptocurrencies for 2024
According to charge, Ver allegedly provided false information to his legal and tax advisors, leading to tax returns that significantly undervalued his assets. In 2017, Ver allegedly controlled and sold approximately 70,000 Bitcoins for approximately $240 million, a transaction he did not report to the IRS. This oversight would have resulted in a tax loss of at least $48 million.
“Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay taxes on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations,” wrote the US Department of Justice.
Additionally, Ver’s financial activities have given rise to additional legal challenges. For example, Genesis, a crypto lending company, sued him for failing to settle cryptocurrency options trades valued at $20.8 million. Likewise, the Seychelles based stock exchange – CoinFex sued Ver over $47 million unsettled margin debt.
Additionally, the cryptocurrency industry has witnessed other significant legal actions. Changpeng “CZ” Zhao, the founder of Binance, also appeared in court on April 30.
Zhao was sentenced to four months in prison after pleading guilty to violating the Bank Secrecy Act. Despite the possibility of a three-year sentence, his cooperation with authorities significantly reduced his prison sentence. He will also have to pay a $50 million fine.
Learn more: Complete Guide to Filing Cryptocurrency Taxes in 2024
These cases highlight the growing scrutiny and regulatory challenges facing the crypto industry. They highlight the importance of complying with financial regulations and tax laws, which are becoming increasingly relevant as the digital asset space evolves.
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