Roger Ver, a.k.a. ‘Bitcoin Jesus,’ was ordered to give up his passport and released on bail by Spanish authorities as the US seeks his extradition over tax fraud charges.  

That’s according to documents seen by Bloomberg that reveal his €150,000 ($163,000) bail, which began on May 17, was granted on the condition that he stay in Spain. 

Ver is also required to visit a Spanish court every two days. Prosecutors attempted to appeal his release but this was rejected. 

The bitcoin investor was arrested in late April after the US accused him of defrauding the Internal Revenue Service (IRS) out of more than $48 million. Just days before his arrest, Ver published his new book Hijacking Bitcoin, which is his own version of Bitcoin’s 2015-2017 blocksize wars.

Read more: Duke Roger Ver becomes finance minister for Joseon

Ver, who owned companies MemoryDealers.com Inc. and Agilestar.com Inc., started buying up bitcoin for himself and his firms, publicizing the purchases and earning his famous nickname.

The IRS alleges, that he ‘concealed and provided false information to his various advisors regarding the number and value of bitcoins he owned and controlled both personally and through his companies.’

Bloomberg reports that Ver’s lawyer, Jaime Campaner, claimed he “is not a fugitive at all, since he has been in touch with the US authorities through his Californian lawyers.” 

“Therefore, he was aware of the investigation and, in my opinion, his arrest didn’t make sense,” he said. 

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The Treasury Department and Internal Revenue Service (IRS) announced today they’re seeking guidance on whether to treat non-fungible tokens (NFTs) as a collectible under tax law.

The notice explains that under section 408(m) of the tax code, acquiring a collectible through an individual retirement account (IRA) is treated as “a distribution from the IRA equal to the cost to the IRA of the collectible.” Similarly, the acquisition of a collectible by an individually directed account “shall be treated as a distribution from the account equal to the cost of the account of the collectible.”

The tax code classifies collectibles to mean:

• any work of art,
• any rug or antique,
• any metal or gem,
• any stamp or coin,
• any alcoholic beverage, or
• any other tangible personal property specified by the Secretary for purposes of this subsection.

In other words, the IRS can choose to add NFTs to the tax code as constituting a collectible. However, currently Section 408(m)(3) specifies that “certain coins and bullion are excluded from the definition of collectible.”

The classification of NFTs as collectibles has repercussions for capital gains tax. As the IRS states in its notice, the sale or exchange of a collectible that’s a capital asset held for over a year “is subject to a maximum 28% capital gains tax rate.” Assets not considered to be collectibles are generally subject to lower capital gains tax rates.

Further, this decision effects new markets tax credit, enterprise zone business, tax shelter registration, and permissible investments for health savings accounts, the IRS stated.

IRS wants to know if you think NFTs are collectibles

The IRS updated the wording of its tax guidance in 2022 for its Form 1040, to explicitly reference NFTs. It broadened the wording of “virtual currency” to “digital assets” in order to include NFTs in tax forms.

Now, it wants to know if you think NFTs count as collectibles. In its notice, the IRS stated that under its own analysis, an NFT constitutes as a collectible if it represents ownership of something it already classifies as a collectible. “For example, a gem is a collectible and therefore an NFT that certifies ownership of a gem constitutes as a collectible,” it noted.

In the same vein, if an NFT represents ownership of something else, like the right to develop a “plot of land” in the metaverse, it may not count as a collectible.

Read more: NFT designer arrested for allegedly evading crypto tax in Israel

This distinction has raised a conundrum within tax filings that has led the IRS to open itself up to comments from the public, in order to gain a better understanding of how to classify NFTs for tax purposes.

The Treasury and the IRS want to know several things, among them:

• whether it has even classified NFTs correctly in its notice,
• if its analysis of NFTs constituting as collectibles in certain cases makes sense (or if other alternatives exist),
• the burdens such a classification would place on NFT owners,
• and what factors it can use to better classify NFTs.

Comments can be submitted until June 19.

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The special agent heading up the Internal Revenue Service’s Criminal Investigation division (IRS-CI) says that crypto companies will need to work closely with federal agencies if they want to build legitimacy.

Speaking to the Wall Street Journal (WSJ), New York-based special agent Thomas Fattorusso also claimed that the only way forward for agencies trying to regulate and fight crime within the space is to work hand-in-hand with those operating in it.

“Cryptocurrency is here to stay,” said Fattorusso (via WSJ).

“We can’t be hostile to the technology. We have to embrace it. It isn’t going anywhere anytime soon and it’s becoming more legitimate as the years roll on.

“My thought is that those relationships will develop as the years go on and as the companies become more comfortable with dealing with the federal government. I don’t see how we can operate in this space without it,” (our emphasis).

According to Fattorusso, the goal is a “symbiotic” relationship between regulators and firms

“It helps them in their legitimacy,” he said. “This is a new industry for everybody. I think we’re still trying to feel our way around it. The companies are feeling their way around it.”

Read more: NY bank ordered to share client user data in IRS crypto tax probe

Can the IRS keep its ‘accountants with guns’?

The major question for the IRS is whether or not it can continue to attract the people and resources it will need to keep pace with the burgeoning crypto industry. This problem is exacerbated by the fact that the agency, currently in the midst of a hiring drive, is competing with the cash-rich crypto industry itself for top talent.

However, Fattorusso says that this isn’t necessarily a bad thing.

“We’ve had several of our cyber agents and managers go to private companies,” he told WSJ.

“We are finding those partnerships to be beneficial because they understand what we need from a law-enforcement aspect to investigate cybercrime. And they can help us in that arena. And now we have an open flow or open dialogue we didn’t have before because we didn’t have a contact there.”

Fattorusso referenced the so-called “revolving door” that will often see agents – affectionately dubbed ‘accountants with guns’ – leave for the private sector only to return years later and bring their crypto-side experience with them. This, he says, is particularly useful given the current crypto landscape.

“If you’re familiar with what’s been going on in some of these exchanges, you know that our agents are marketable, and they’re getting picked up in these various private companies because of the work that they do and because of the knowledge that they bring,” he said (our emphasis).

“We’re hoping to develop those relationships even further. ‘OK, you used to work here with us, maybe you can help us with investigations.’”

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The Internal Revenue Service (IRS) has issued a court summons forcing M.Y. Safra Bank to share the details of a client’s users in order to crack down on tax evasion in relation to crypto transactions.

The Department of Justice (DoJ) announced that a District Judge gave the IRS permission to issue a “John Doe” summons towards Safra Bank who currently offers their services to crypto prime broker SFOX.

A John Doe summons refers to an unidentified defendant in a case, in this example the unknown SFOX users who potentially aren’t paying taxes on their crypto transactions.

The IRS is eyeing SFOX over potential crypto transactions that fail to obey US crypto tax laws. The issued summons will force Safra Bank to provide the IRS with SFOX user records that may help identify unknown users that are potentially failing to file their crypto gains in their taxes.

Read more: Michael Saylor called tax cheat after spending too much time in DC

At least ten US taxpayers that rely on SFOX for its crypto trading failed to report their transactions to the agency according to the press release.

“The government is committed to using all of the tools at its disposal, including John Doe summons, to identify taxpayers who have understated their tax liabilities by not reporting cryptocurrency transactions, and to make sure that everyone pays their fair share,” attorneys stated (our emphasis).

IRS investigating SFOX crypto transactions

SFOX is a crypto trading platform that currently deals with 175,000 users and has facilitated ~$12 billion worth of transactions since 2015. The New York bank offers SFOX users cash-deposit bank accounts where funds can be used to buy and sell positions in crypto.

To support the summons, the IRS is claiming that users who hold crypto typically fail to report their tax returns on any profits made from crypto.

Read more: Ignorance no excuse: IRS to hunt NFT tax cheats for billions of dollars

The IRS says it lacks third-party reporting and that John Doe summons typically reveal crypto dealers are significantly failing to report crypto transactions to the IRS. 

“The information sought by the summons approved today will help to ensure that cryptocurrency owners are following the tax laws,” officials said.

The DoJ makes it clear that summonses does not implicate Safra Bank in any wrongdoing. 

For more informed news, follow us on Twitter and Google News or listen to our investigative podcast Innovated: Blockchain City.

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US tax officials say they’re gearing up for a tidal wave of NFT-related tax evasion cases this year, with many collectors still unsure of how to declare their crypto income.

As reported by Bloomberg, tax experts in the US suggest profits from sales on platforms like OpenSea or Rarible are taxed as ordinary income (up to 37%).

They also generally agree that US residents buying NFTs with crypto owe capital-gains taxes on both the purchase and future re-sales.

But direct government guidance around the $44-billion NFT industry has been thin on the ground.

Many NFT buyers are likely unaware they need to pay taxes at all. Others may not know they’re required to pay taxes quarterly if they owe more than $1,000.

And while nobody knows exactly how much tax is owed, industry insiders reckon NFT investors could owe billions of dollars this year.

NFT tax guidance missing but IRS doesn’t care

It could be that the US government deems NFTs “collectibles,” which reportedly carries a max capital-gains rate of 28% (compared to 20% for stocks and most cryptocurrencies).

But there’s no formal guidance specifically for NFTs, and the US Internal Revenue Service (IRS) doesn’t accept ignorance as an excuse.

In fact, some reportedly reckon the IRS could start auditing before clarifying rules around NFT trading and investment.

“You don’t get to not report gains or losses because the IRS has failed to provide guidance that meets your expectations,” tax attorney James Creech told Bloomberg.

Read more: [Can NFTs be ‘art’? Wikipedia can’t decide, will worry about it later]

“The harder it is for people to get to a reasonable (or ideally) a right conclusion, the easier it is to ignore it,” warned Creech.

For more information about how the US taxes crypto, check out the IRS’ FAQ here.

Follow us on Twitter for more informed crypto news.

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