Bitcoin Jesus will not go quietly into the night…or pay $50 million in alleged unpaid taxes.
Roger Ver was arrested by the Spanish authorities in April of 2018. He claims that tax fraud allegations made by the Department of Justice are false. “unconstitutional.”
DOJ filed an a “defective indictment,” Ver’s lawyers say, that misquotes communications between Ver and his legal teams and — stop me if you’ve heard this one before — “hangs on a semblance of regulatory clarity that never existed.”
Ver’s lawyers claim that Bitcoin Jesus was trying to avoid the unclear tax code of 2014 by consulting with an anonymous law firm on his decision not to stay in the US. Ver and his lawyers created a hypothetical situation where Ver would sell all his holdings. However, his lawyers pointed out that he could not have sold his bitcoins in 2014.
“On March 2, 2014, however, such a sale was likely impossible as a technological matter and catastrophic as a matter of market value. At the time, BTC was a thinly traded market with a limited number of active traders,” According to the document, Mt. Gox — which had just collapsed.
Ver had, with the help of several tax professionals and attorneys, calculated all unrealized gains, and also exit taxes, with this in mind. Ver, according to his attorneys, was also exploring whether he would be personally liable for the bitcoin held by companies.
There’s been a lot back and forth in this tax case about Ver’s unrealized gains and his previous communications on his bitcoin sales, as well as how he had recorded his bitcoin holdings. But essentially, the motion to dismiss falls back on the fact that the current tax code — and by current, I also mean the framework that existed in 2014 — didn’t really account for crypto.
It is a criminal indictment “on impermissibly vague laws that, at all relevant times, provided no basis for a person of reasonable intelligence to understand the proper application of tax laws to digital currencies; and they rely on the government’s persistent trampling on basic rights and notions of fair play,” The team disagreed.
What’s interesting is the timing. Ver’s trial is scheduled to begin in Lower Manhattan in February next year. He could be extradited. The incoming administration’s apparent favorable attitude towards crypto has been discussed endlessly, and Manhattan prosecutors are already decreasing the number of cases that they pursue.
It’s up to the Judge at this stage whether Bitcoin Jesus is able to get his case dismissed. But I am sure his team believes there has never been a better time for his filing.
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