Author | TaxDAO
With the rapid rise of the crypto market, regulatory risks represented by tax compliance have also become increasingly prominent. In April 2024, Roger Ver, known as the 'Bitcoin Jesus', was accused by the IRS of tax evasion amounting to $48 million and was arrested in Spain. For months, the progress of this case has kept the nerves of crypto asset industry practitioners on edge and further highlighted the importance of tax compliance in the crypto industry.
As Bitcoin breaks the $100,000 mark, the 'Bitcoin Jesus' case has seen new developments last week. Roger Ver's legal team submitted a motion on December 4, 2024, requesting the court to dismiss the IRS's tax evasion charges against Roger Ver. He is currently awaiting the U.S. extradition decision in Spain. TaxDAO will review the 'Bitcoin Jesus' case in this article and provide compliance advice on related tax risks.
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1. The Background of the Bitcoin Jesus Case
1.1 Who is the Bitcoin Jesus?
Roger Ver was born in 1979 in Silicon Valley, USA, and is a prominent libertarian and anarchist. In 1999, during his college years, he founded Memory Dealers, a company focused on reselling computer parts. He later dropped out and started managing the company full-time, earning his first million dollars by the age of 24 due to his keen business acumen.
In 2011, Roger Ver began investing in Bitcoin and announced that his company Memory Dealers would accept Bitcoin payments, becoming the world's first business to support Bitcoin payments. Since then, Roger Ver has continuously purchased and received Bitcoin in large quantities both personally and through his company, becoming the CEO of Bitcoin.com and a founder of the Bitcoin Foundation. He actively promoted the application and value of Bitcoin, driving its early adoption and accumulating significant influence in the crypto asset field, which earned him the title of 'Bitcoin Jesus' from the media and crypto community.
1.2 Why did the IRS sue the Bitcoin Jesus?
In 2014, Roger Ver obtained citizenship in the Federation of Saint Kitts and Nevis and soon after renounced his U.S. citizenship. According to U.S. tax law, individuals who renounce their citizenship must fully report the capital gains on their global assets, including their holdings of Bitcoin and fair market value. The IRS believes Roger Ver concealed and underreported his personal asset value before renouncing his citizenship and obtained and sold approximately 70,000 Bitcoins from his U.S.-based company after renouncing, earning nearly $240 million and evading at least $48 million in taxes.
In this regard, the IRS has primarily raised two charges: First, Roger Ver did not comply with exit tax regulations. When renouncing his U.S. citizenship, Roger Ver underreported the actual number of Bitcoins held by him and his controlled companies, concealing related transactions and evading this tax obligation. Second, Roger Ver violated his tax obligations as a non-U.S. tax resident. After renouncing U.S. citizenship, Roger Ver obtained and sold Bitcoin from his U.S.-based company in 2017, earning substantial income. Although Roger Ver renounced his U.S. citizenship, since his company is based in the U.S., he failed to report such income after transferring the Bitcoins held by the U.S. company to his name, thereby evading tax obligations.
