Roger Ver, also known as “Bitcoin Jesus” due to his early and enthusiastic support of Bitcoin, now faces serious legal challenges. A recent indictment charges him with mail fraud, tax evasion, and filing false tax returns.
Following the unsealing of these charges, Spain authorities arrested Ver, and the US is now seeking his extradition.
Why Roger Ver Faces Allegations of Bitcoin Tax Evasion
Formerly a resident of Santa Clara, California, Ver owned MemoryDealers.com Inc. and Agilestar.com Inc., which sold computer and networking equipment. He began acquiring Bitcoin for personal and business purposes around 2011.
However, his legal troubles escalated after he renounced his US citizenship in 2014, following his acquisition of citizenship in St. Kitts and Nevis. Consequently, he was required to report capital gains from his global assets, including 131,000 Bitcoin, valued at about $871 each at that time.
Read more: The Ultimate US Crypto Tax Guide for 2024
According to the indictment, Ver allegedly provided false information to his legal and tax advisors, leading to tax returns that drastically undervalued his assets. By 2017, it is alleged that Ver controlled and sold about 70,000 Bitcoin for roughly $240 million, a transaction he did not report to the IRS. This oversight purportedly resulted in a tax loss of at least $48 million.
“Even though Ver was not then a US citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were US corporations,” the US Department of Justice wrote.
Moreover, Ver’s financial activities have led to additional legal challenges. For instance, Genesis, a crypto lending company, has sued him for not settling cryptocurrency options transactions valued at $20.8 million. Similarly, the Seychelles-based exchange – CoinFex pursued Ver over an unsettled $47 million margin debt.
Additionally, the cryptocurrency sector has witnessed other significant legal actions. Changpeng “CZ” Zhao, the founder of Binance, also faced the courts on April 30.
Zhao received a four-month prison sentence after pleading guilty to violating the Bank Secrecy Act. Despite the potential for a three-year sentence, his cooperation with authorities substantially reduced his prison term. Moreover, he also has to pay a $50 million fine.
Read more: Complete Guide to Filing Cryptocurrency Taxes in 2024
These cases highlight the growing scrutiny and regulatory challenges facing the crypto industry. They emphasize the importance of adhering to financial regulations and tax laws, which are becoming increasingly relevant as the digital asset space evolves.
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