Early Bitcoin Investor Roger Ver Faces Tax Fraud Indictment
Roger Ver, a well-known early investor in cryptocurrency and often referred to as Bitcoin Jesus, has recently been arrested in Spain based on charges outlined in a U.S. indictment.
Ver is facing serious allegations, including mail fraud, tax evasion, and filing false tax returns, all with the alleged intention of avoiding over $48 million in U.S. taxes. This arrest is part of a larger effort by U.S. authorities to crack down on questionable practices within the growing cryptocurrency industry, which has already seen other high-profile figures facing legal consequences.
Among those recently affected by the U.S. crackdown is Changpeng Zhao, the co-founder of Binance, the world’s largest cryptocurrency exchange, who received a four-month prison sentence. Similarly, Sam Bankman-Fried, the former CEO of the FTX cryptocurrency exchange, was sentenced to 25 years in prison. These cases highlight the increasing scrutiny of ethical and legal standards in the crypto sector.
According to the indictment, Ver, who gave up his U.S. citizenship in 2014 and became a citizen of St Kitts and Nevis, failed to report capital gains from his early Bitcoin investments starting in 2011. Despite his change in citizenship, U.S. tax laws still required Ver to file tax returns that included gains from specific assets like Bitcoin, along with their fair-market values. By February 4, 2014, Ver and his companies allegedly owned approximately 131,000 Bitcoin.
The legal documents claim that Ver provided misleading information, which was sent to a law firm responsible for preparing his tax returns. This led to significantly undervalued tax filings for two of his companies, which reported holding only 73,000 Bitcoins and made no mention of Ver’s personal Bitcoin holdings. This manipulation of information is a key focus of the charges against him.
Complicating Ver’s legal situation further, in November 2017, he sold tens of thousands of Bitcoins for around $240 million without disclosing this transaction to his accountant. As a result, the Internal Revenue Service (IRS) allegedly missed out on at least $48 million in taxes. This oversight on such a large sum underscores the scale of the tax evasion Ver is accused of.
The charges against Ver were announced by the Justice Department’s Tax Division and U.S. Attorney Martin Estrada for the Central District of California. The IRS Criminal Investigation’s cybercrimes unit is handling the investigation, highlighting the technical complexities involved in prosecuting crimes within the cryptocurrency realm.
Ver’s influence in the cryptocurrency world extends beyond Bitcoin. He has also been a significant investor in other major crypto platforms, such as Kraken and Blockchain.com. While initially a prominent supporter of Bitcoin, Ver’s relationship with the community soured due to disagreements over proposed changes to Bitcoin’s network operations. These disagreements led Ver to shift his support to Bitcoin Cash, a spin-off from Bitcoin, in 2017. He elaborated on this decision in a book released earlier this year.
Reactions on social media to Roger Ver’s arrest varied, reflecting a range of sentiments within the cryptocurrency community. Among the vocal critics was Dan Held, a former growth lead at Kraken, who strongly disapproved of Ver’s actions. Held accused Ver of jeopardizing his professional career and damaging personal relationships through targeted attacks and public denunciations. He also criticized Ver for significantly misrepresenting Bitcoin’s potential, claiming that Ver’s actions caused a deep division within the Bitcoin community, often referred to as a “civil war.” Held’s comments highlight the contentious nature of the debate surrounding Ver’s influence on the cryptocurrency landscape.
As the legal process unfolds, the case against Roger Ver is likely to set a significant precedent for how U.S. authorities handle similar cases in the crypto industry, particularly those involving tax evasion and fraud.
