Roger Ver, also known as the “Bitcoin Jesus,” is currently fighting an eight-count indictment by the U.S. Attorney for the Central District of California. According to the charges, Ver had failed to file taxes for $50 million of $240 million worth of Bitcoin transactions in 2017.
Other charges include that he undervalued his assets when he relinquished his US citizenship in 2014 to escape higher taxes on expatriation.
Bitcoin Jesus fights back! Roger Ver challenges a $50M tax evasion indictment, claiming it's politically motivated and a result of government overreach. (Coinpedia) #Bitcoin #RogerVer pic.twitter.com/FxgWqZDvZt
— Crypto Professor X (@CryptProfessorX) December 4, 2024
According to prosecutors, Ver undervalued two companies before his expatriation – MemoryDealers US and Agilestar – in order to pay less exit tax. The exit tax affects the untaxed capital gains of persons giving up their citizenship in the United States.
Ver’s lawyer has since come to his defense and stated that the accusations are due to the absence of clarity in the laws regarding crypto taxes at the time. The defense also points out that the IRS issued its first official guidance on how cryptocurrencies should be taxed in October 2014, when Ver had already renounced his US citizenship
The indictment also states that Ver avoided payment of taxes in regard to many Bitcoin transactions in 2017. However, his lawyers claim that he was entirely dependent on the advice of his advisors to make sure that he did not breach any laws.
Ver’s lawyers from the firms of Steptoe LLP and Kimura London & White moved to dismiss the case on the grounds of governmental misconduct. They submitted that the prosecutors unlawfully obtained privileged communications between defense counsel and their clients and improperly used them to bolster their case.
The defense says that Ver sought legal advice on how to meet all the legal requirements, including taxes and emails that reveal his intention to meet his obligations. In one 2013 email to his attorney, Ver stated his wish to avoid future disagreements with the IRS over his exit tax payments.
The defense has also claimed that Ver is being selectively prosecuted for daring to speak out against the US’s perceived over-zealous regulation of cryptocurrencies. They claim that filing criminal charges in a case of regulatory violations that are not well defined is unconstitutional.
Crypto community criticizes DOJ
The case also illustrates the ambiguity of cryptocurrency taxation in the early 2010s. This case has attracted much interest from the cryptocurrency industry.
Civil rights attorney Robert Barnes, a supporter of Ver, said that this was a clear case of selective enforcement. “This prosecution reflects political targeting rather than an objective review of the evidence,” Barnes said.
Additionally, Peter Schiff, a renowned economist, also supports Roger Ver’s motion to dismiss tax evasion charges. He stated, “Hopefully, he wins, forcing the government to lower the top income tax rate or risk a flood of expatriations.”
#Bitcoin pioneer @rogerkver's motion to dismiss tax evasion charges on the grounds that the "exit tax" is unconstitutional is correct; it’s an unapportioned direct tax. Hopefully, he wins, forcing the government to lower the top income tax rate or risk a flood of expatriations.
— Peter Schiff (@PeterSchiff) December 4, 2024
Ver, who was apprehended in Spain this year, was freed on a $160,000 bond in May. He is still awaiting extradition to the United States of America. “This prosecution must end,” Ver’s attorneys stated. “The evidence shows that this case lacks fundamental fairness and transparency.”
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