Roger Ver, an early investor in cryptocurrencies, who gained fame as Bitcoin Jesus for his passionate advocacy of Bitcoin in its early days, was recently arrested in Spain based on charges brought against him in the United States.
Ver is facing serious allegations, including mail fraud, tax evasion, and filing false tax returns, all allegedly done in an attempt to evade over $48 million in taxes. This arrest is part of a broader effort by U.S. authorities to crack down on questionable practices within the rapidly growing cryptocurrency industry, which has seen other prominent figures facing legal consequences.
Among those recently impacted by this crackdown is Changpeng Zhao, the co-founder of Binance, the largest cryptocurrency exchange in the world, who was sentenced to four months in prison. Similarly, Sam Bankman-Fried, the former CEO of FTX cryptocurrency exchange, received a 25-year prison sentence. These cases highlight the increasing scrutiny of ethical and legal standards in the crypto sector.
According to the indictment, Ver, who renounced his U.S. citizenship in 2014 to become a citizen of St Kitts and Nevis, failed to report capital gains from his early Bitcoin investments, which began in 2011. Despite his change in citizenship, U.S. tax laws required Ver to file tax returns that included gains from specific assets, such as Bitcoin, along with their fair-market values. By February 4, 2014, Ver and his companies allegedly owned approximately 131,000 Bitcoin.
The legal documents allege that Ver provided misleading information to a law firm responsible for preparing his tax returns. This misinformation resulted in significantly undervalued tax filings for two of his companies, which reported only 73,000 Bitcoins and omitted any mention of Ver’s personal Bitcoin holdings. This manipulation of information forms a crucial part of the charges against him.
Further complicating Ver’s legal situation, in November 2017, he sold tens of thousands of Bitcoins for around $240 million. This significant transaction was not disclosed to his accountant, leading to the Internal Revenue Service (IRS) missing out on at least $48 million in taxes, according to the indictment. The oversight of such a large sum underscores the scale of 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 investigation is being handled by the IRS Criminal Investigation’s cybercrimes unit, reflecting the technical complexities involved in prosecuting crimes within the cryptocurrency domain.
Ver’s influence in the cryptocurrency world extends beyond Bitcoin. He has been a significant investor in other major crypto platforms, including 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 were significant enough for 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 were mixed, reflecting the diverse sentiments within the cryptocurrency community. One vocal critic 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 misrepresenting Bitcoin’s potential, claiming that Ver’s actions led to a deep division within the Bitcoin community, often referred to as a “civil war.” Held’s comments underscored 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 expected to set a significant precedent for how U.S. authorities handle similar cases in the cryptocurrency industry, particularly those involving tax evasion and fraud.
