Case details: "Bitcoin Jesus" Roger Ver was arrested on suspicion of tax evasion and will be extradited to the United States

Editor: Cat Brother, Wu Says Blockchain

On April 30, the U.S. Department of Justice announced that Roger Ver (Bitcoin Jesus) is accused of evading nearly $50 million in taxes, facing charges of mail fraud, tax evasion, and filing false tax returns. He was arrested in Spain over the weekend, and the U.S. is seeking his extradition to face trial.

Roger Ver is an early evangelist of Bitcoin and a significant supporter of BCH, as well as an early investor in Bitcoin startups like Bitcoin.com and Blockchain.com, CoinFLEX, among others. However, in recent years, Roger Ver has frequently been involved in financial disputes with companies such as Matrixport, CoinFLEX, and Genesis.

Here is the full text of the press release from the U.S. Department of Justice:

Original link:

https://www.justice.gov/opa/pr/early-bitcoin-investor-charged-tax-fraud

Yesterday, an indictment was unsealed, accusing early Bitcoin investor Roger Ver of wire fraud, tax evasion, and filing false tax returns. Ver was arrested in Spain over the weekend based on criminal charges from the U.S. The U.S. will seek to extradite Ver back to the United States for trial.

According to the indictment, Ver, who previously lived in Santa Clara, California, owned two companies, MemoryDealers.com Inc. and Agilestar.com Inc., which sold computer and networking equipment. Starting in 2011, Ver allegedly purchased Bitcoin for himself and his companies. He also actively promoted Bitcoin, even earning the nickname "Bitcoin Jesus."

On February 4, 2014, Ver allegedly obtained citizenship in St. Kitts and Nevis and shortly thereafter renounced his U.S. citizenship through a process known as expatriation. It is alleged that after expatriating, U.S. law required Ver to file tax returns reporting capital gains from the constructive sale of his worldwide assets (including Bitcoin) and to report the fair market value of those assets. He was also allegedly required to pay a tax known as an "exit tax" on those capital gains. As of February 4, 2014, Ver and his companies allegedly held approximately 131,000 Bitcoins, which were trading at about $871 each on several major exchanges. MemoryDealers and Agilestar allegedly held about 73,000 of those Bitcoins.

It is alleged that Ver hired a law firm to assist him with the renunciation of citizenship and to prepare the related tax returns. Ver also hired an appraiser to value his two companies. Ver provided false or misleading information to the law firm and the appraiser, concealing the true number of Bitcoins owned by him and his companies. As a result, the law firm allegedly prepared and submitted false tax returns that severely undervalued the two companies and their 73,000 Bitcoins, failing to report any Bitcoins personally owned by Ver.

The indictment further alleges that as of June 2017, Ver's two companies still held about 70,000 Bitcoins. Around that time, Ver allegedly took ownership of those Bitcoins and sold tens of thousands of them on a cryptocurrency exchange in November 2017, generating approximately $240 million in cash. Although Ver was no longer a U.S. citizen at that time, he still had a legal obligation to report and pay certain taxes on distributions, such as dividends from MemoryDealers and Agilestar, both of which are U.S. companies. It is alleged that Ver concealed from his accountant the fact that he had received and sold Bitcoins from MemoryDealers and Agilestar that year. Consequently, Ver's 2017 personal income tax return did not report any income or taxes related to the Bitcoin distributions from MemoryDealers and Agilestar.

It is alleged that Ver caused the IRS to lose at least $48 million.

Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Tax Division of the U.S. Department of Justice, and Martin Estrada, U.S. Attorney for the Central District of California, announced the news.

The IRS Criminal Investigation Division's Cyber Crimes Unit is investigating the case.

Matthew J. Kluge, Assistant Director of the Tax Division of the U.S. Department of Justice, and trial attorneys Peter J. Anthony and James C. Hughes, Assistant U.S. Attorney for the Central District of California, are responsible for the prosecution of this case.

The indictment is merely an accusation. All defendants are presumed innocent until proven guilty in a court of law.

Financial Disputes

Earlier, during the extreme market volatility following the collapse of Terra in the first half of 2022, Roger Ver's margin trading account suffered significant losses, and CoinFLEX failed to liquidate Roger Ver's large positions in a timely manner, ultimately being forced to seek restructuring, leading to an ongoing dispute between Roger Ver and CoinFLEX CEO Mark Lamb regarding responsibility for the platform's collapse.

On June 29, 2022, Mark Lamb tweeted, "Roger Ver owes CoinFLEX $47 million in USDC. We have a written contract requiring Roger Ver to personally guarantee any negative balance in his CoinFLEX account and to regularly top up margin. However, he has violated this agreement, and CoinFLEX has issued a default notice to Roger Ver." Roger Ver responded on Twitter, claiming that the debt was a rumor and countered, "I not only do not owe this counterparty any debt, but rather this counterparty owes me a large sum of money." In January 2023, Mark Lamb published an open letter to Roger Ver and Blockchain.com CEO Peter Smith, stating that CoinFLEX had stopped withdrawals for 250 days, and 98% of people voted in favor of CoinFLEX's restructuring proposal, but it was continuously obstructed by the other party, preventing the restructuring from proceeding.

On January 25, 2023, a division of the now-bankrupt Genesis Global Capital accused Roger Ver in court of failing to settle cryptocurrency options trades. According to the filed documents, GGC sought "monetary damages for the defendant's failure to settle cryptocurrency options trades that expired on December 30, 2022, in an amount to be determined at trial, but not less than $20.9 million."

The next day, Roger Ver responded on Reddit, stating that he had sufficient funds to pay Genesis what he owed and was willing to do so. "However, our agreement requires Genesis to remain solvent, as Genesis cannot ask its customers to play a game of 'the customer loses on the front, and Genesis wins on the back.'" He believed that Genesis began losing solvency in June of last year and looked forward to Genesis explaining how it accurately assessed some problematic projects, including the discrepancies between customer collateral valuations and their own crypto assets.

On November 6, 2023, Roger Ver revealed that he had sued Smart Vega Holding Limited, a subsidiary of Matrixport owned by Wu Jihan, in August 2022, claiming $8 million. He alleged that they froze his funds because they held him responsible for the losses at CoinFLEX.

Matrixport stated that this action was the result of an investigation into trading violations. Matrixport claimed that Roger Ver was a client of bitcom. This matter stemmed from the exchange's investigation into Mr. Ver's margin trading violations, which found that he had breached contractual obligations and was required to pay penalties due to margin call defaults.