An indictment filed in federal court in California alleges that when Mr. Ver renounced his U.S. citizenship in 2014 after becoming a citizen of the Caribbean nation of St. Kitts, he owned 131,000 Bitcoins. They allege that he failed to report the incident and carried out a fraudulent scheme. And Nevis.
At the time, each Bitcoin was worth about $871. The transaction price on Wednesday morning was $57,416, making Ver's 131,000 Bitcoins worth more than $7.5 billion.
To become a U.S. expat, you must pay special taxes to the Internal Revenue Service. The Department of Justice alleges that in preparing these tax returns, Mr. Ver understated his Bitcoin holdings and evaded taxes on Bitcoin.
The indictment further alleges that Barr continued to under-report his ownership of Bitcoin even after he was deported from the United States and owed U.S. taxes.
Mr. Va was arrested in Spain over the weekend. The United States is seeking his extradition to stand trial on eight charges related to tax evasion, mail fraud and filing false tax returns.
“At this point, I can say that I am very disappointed and surprised that Mr. Va was arrested during his trip to Spain. These charges should never have been brought,” Brian Skarlatos, Mr. Va's attorney, told CNBC. It was not,” he said in a statement. “Mr. Barr relied on top-notch tax experts to help him report his Bitcoin and always intended to be fully compliant with his U.S. tax obligations. We will continue to defend his exoneration in court if necessary. I look forward to proving it.”
If convicted, Barr could be sent back to federal prison for the felony charge, after pleading guilty in 2002 to selling an explosive device called the Pest Control Report 2000 on eBay. I spent 10 months there.
As Bitcoin has boomed and busted over the past decade, governments have begun to pay more attention to the potential for financial crimes associated with digital currencies. The IRS has worked to become more sophisticated in tracking Bitcoin investors as the currency becomes more mainstream.
According to the indictment, the IRS used a strategy called “cluster analysis” to track the blockchain and identify Ver's Bitcoin transactions.
According to a 2013 CNBC profile, Ver made his first $1 million in Bitcoin in 2011, the same year he started trading Bitcoin.
His investment in Bitcoin and promotion of the digital currency has led some in the community to perceive him as a Christ-like figure.
He told CNBC in 2013 that he earned the nickname “Bitcoin Jesus” after watching Bitcoin Foundation founder Peter Vesenes explain the digital currency to high school students.
“All the kids were fascinated by Bitcoin and were paying attention to my every word,” Barr told CNBC.
“You're like the Jesus of Bitcoin and you've got all these disciples around you,” Vessenes commented, according to Ver.
