Founders Of Crypto ICO Plead Guilty To Tax Evasion After Raising $24 Million From Investors

The owners of a cryptocurrency company have pleaded guilty to tax evasion, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Bitqyck founders Bruce Bise and Samuel Mendez were charged with tax evasion in August. Mr. Bise pleaded guilty on Sept. 9; Mr. Mendez pleaded guilty this morning.

According to plea papers, Mr. Bise and Mr. Mendez admitted that Bitqyck raised approximately $24 million from more than 13,000 investors. Instead of fulfilling their promises to these investors, the defendants used Bitqyck funds on personal expenses, including casino trips, cars, luxury home furnishings, art, and rent.

“Transacting in virtual currencies does not exempt businesspeople from paying income taxes,” said Acting U.S. Attorney Chad Meacham. “These crypto-savvy defendants exploited an emerging technology, lying to their investors, pocketing the proceeds, and concealing the income from the IRS. The Department of Justice is committed to ensuring that every taxpayer pays his or her fair share – and to protecting the crypto space from bad actors.”

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Release The Kraken?—In Re Tax Liability Of John Does

No, I’m not referring to Laurence Olivier’s (or Liam Neeson’s) quote as Zeus in Clash of the Titans. The “Kraken” is actually a reference to Payward, Inc. dba Kraken—a digital currency exchange and trading platform. In one of its more recent investigations in the digital currency realm, the Internal Revenue Service is seeking information on cryptocurrency transactions (and the associated taxpayers) related to Kraken. Currently, the United States is seeking to serve John Doe summonses on Kraken to uncover helpful information as a part of its ongoing cryptocurrency investigation. However, such summonses are not without limit, as a federal court in California is currently evaluating whether the summons at issue conforms with the requirements of Section 7609(f).

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