The Arrest of Bitcoin Prominent Advocate Roger Ver
Early Bitcoin investor and advocate Roger Ver, often referred to as "Bitcoin Jesus," has been arrested in Spain on charges of U.S. tax evasion as authorities allege he evaded at least $48 million in taxes. The U.S. Department of Justice disclosed the charges following Ver's arrest during a recent weekend excursion.
(Photo : Unsplash/ Aleksi Räisä)
The Charges Against Ver
Ver's indictment occurred in a federal court in Los Angeles. After firmly sealing the documents, authorities unsealed them after his arrest. At 45, Ver faces serious allegations that could significantly impact his freedom and reputation. The U.S. Supreme Court has already dismissed an appeal by a law firm over a grand jury subpoena related to Ver's case last year, hinting at the gravity of the situation.
Legal Counsel and Ver's Position
Bryan Skarlatos, Ver's attorney, stated his client's surprise and disappointment at the arrest. Despite the circumstances, Skarlatos reinforces Ver's stance. He avers Ver leaned on expert tax advice to ensure compliance with U.S. tax laws. Ver intends to prove his innocence in court if it comes to that. This legal development is a considerable jolt to Ver, who began buying bitcoins in 2011. As the chief executive of Bitcoin.com for a period, he avidly promoted the cryptocurrency and earned his nickname "Bitcoin Jesus."
Renunciation of Citizenship and Tax Consequences
In 2014, Ver gave up his U.S. citizenship, becoming a St. Kitts and Nevis citizen. This decision had immediate and substantial tax obligations. U.S. federal tax law considers the property of a renouncing citizen as sold. This "constructive sale" occurs at the property's fair market value just a day before the loss of citizenship. All gains from this must be included in that year's tax returns. Ver and his companies MemoryDealers.com and Agilestar.com controlled an estimated 131,000 bitcoins at his renunciation. The trading value for each bitcoin stood at approximately $871, rendering the total value above $114 million.
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Allegations of Misinformation and Underreported Taxes
Ver allegedly supplied false information to a law firm and an appraiser. Consequently, his tax returns underestimated the value of his companies and their bitcoin holdings. The returns also omitted Ver's personal Bitcoin ownership. In 2017, Ver reportedly sold 70,000 bitcoins owned by his companies for a staggering $240 million. Nonetheless, prosecutors say he neglected to pay taxes owed on distributions from these companies.
The Way Forward and Extradition Plans
The Department of Justice will attempt to extradite Ver to face these charges in the U.S. The indictment alleges the IRS lost $48 million in taxes between 2014 and 2017 due to Ver's actions. This situation unfolds as the cryptocurrency sector remains in focus for its financial and legal implications.
Roger Ver's arrest marks a crucial milestone in the legal landscape surrounding cryptocurrencies and taxation. His case highlights the complex interplay between individual tax obligations and burgeoning digital assets. Ver's future and broader implications for crypto taxation remain balanced as the legal proceedings continue. The cryptocurrency community watches with bated breath as one of their most vocal proponents faces rigorous legal scrutiny.
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