(CN) — Roger Ver, otherwise known as "Bitcoin Jesus," an early investor in and promoter of the pioneering cryptocurrency, was indicted for tax fraud on Tuesday.
The 45-year-old was arrested over the weekend in Spain, based on the recently filed criminal charges. The U.S. is seeking to extradite him to stand trial.
Born in Silicon Valley, Ver moved to Japan in 2005 and renounced his U.S. citizenship in 2014 after obtaining, he said, a passport from the Caribbean island nation of Saint Kitts and Nevis — essentially a $250,000 citizenship.
That expatriation would have consequences for Ver. For one thing, he was denied reentry into the U.S. It also meant Ver was required by U.S. law to pay a hefty, one-time "exit tax," a capital gains tax on all his sales and assets, including his cryptocurrency holdings.
On Feb. 3, 2014, Ver owned some 131,000 bitcoins either directly or through his companies, according to the eight-count indictment. At the time, those bitcoins were worth about $871 each for a total of approximately $114 million.
In 2012, before his expatriation, Ver hired a law firm to prepare his coming exit tax forms. The firm advised Ver to "'pretend' to sell all of his assets on the day before his anticipated expatriation and calculate a tax on any gain from those pretend sales above $651,000, according to the indictment. Ver then provided false information to both the firm and an appraiser, downplaying the number of bitcoins he and his companies were holding.
In 2017, after he had renounced U.S. citizenship, Ver sold tens of thousands of bitcoins on cryptocurrency exchanges for around $240 million in cash. He was still required to pay taxes on those sales, because they were technically distributions from American-based companies he owned.
"The false and fraudulent statements and representations and material omissions" made by Ver, according to the indictment, "collectively deprived the IRS of taxes rightfully due in the amount of approximately $48 million."
If convicted, Ver would face a maximum of 20 years in federal prison for each of the three mail fraud counts; up to five years for each of the two tax evasion counts; and up to three years for each of the three counts of subscribing to a false tax return.
It would not be his first trip to federal prison. In 2002, Ver pleaded guilty to selling explosives without a license on eBay and was sentenced to 10 months. In a YouTube video titled "My Story of Being Tortured in Prison," Ver claimed to have been selling "firecrackers" and claimed he was jailed for "speaking truth to power."
By 2017, Ver had grown displeased with the stewardship of bitcoin and had begun promoting another cryptocurrency, Bitcoin Cash, which he claimed was closer to Bitcoin's original intention. Earlier this month he published a book, "Hijacking Bitcoin," which one reviewer called "a damning indictment of the turmoil and nastiness that plagued the Bitcoin community" in recent years, since the disappearance of its enigmatic (and supposed) creator, Satoshi Nakamoto.
Ver was also an outspoken libertarian who dreamed of starting a new country, or "non country," as he called it, without taxes.
As he explained to Bitcoin Magazine, "Everybody can do whatever they want within the guidelines, and they will be agreeing to the guidelines by the time they purchase in. There will not be a government. It will all be private institutions and private organizations.” He later uploaded a YouTube video titled "Taxation is Theft."
Follow @hillelaron
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
