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‘Bitcoin Jesus’ Calls Rich to Tax-Free Tropical Paradise

By Jason Clenfield and Pavel Alpeyev
June 16, 2014 9:31 AM EDT 170 Comments
Roger Ver, founder of Passports for Bitcoin.com., holds his passpor in the Shibuya district of Tokyo on June 4, 2014. He's known as Bitcoin Jesus in the world of cyber-currencies. Though he can't promise you heaven, he is offering a haven: a condo in the Caribbean that comes with a new passport and almost zero taxes.
Photographer: Tomohiro Ohsumi/Bloomberg
Roger Ver, founder of Passports for Bitcoin.com., holds his passpor in the Shibuya district of Tokyo on June 4, 2014. He's known as Bitcoin Jesus in the world of cyber-currencies. Though he can't promise you heaven, he is offering a haven: a condo in the Caribbean that comes with a new passport and almost zero taxes.

He’s known as Bitcoin Jesus in the world of cyber-currencies. Though he can’t promise you heaven, he is offering a haven: a condo in the Caribbean that comes with a new passport and almost zero taxes.

Meet Roger Ver, ex-U.S. citizen, ex-convict, millionaire investor, self-described libertarian and founder of Passports for Bitcoin.com.

The ever-expanding universe of what you can buy with bitcoins includes a hotel stay in Rome, a kimono in Tokyo, and cable TV in the U.S. Ver, a pioneer investor in bitcoin startups, now says he can add citizenship to the list.

Specifically, that’s the right to live in the Federation of St. Kitts and Nevis, two sun-kissed islands a three-hour flight from Miami. St. Kitts has run an invest-and-become-a-citizen program since 1984, making it the oldest of its kind, says the country’s website.

Is Bitcoin Real Money?

Plunk down $400,000 for real estate and you get a passport that allows visa-free travel to 120 countries. There are no taxes on personal income or capital gains and the islands’ restrictive disclosure laws offer shelter from outside scrutiny, according to the Tax Justice Network, a think tank that studies secrecy jurisdictions.

Ver’s website, in English, Russian and Chinese, offers a way to purchase a piece of that paradise with bitcoins. He says it will help people who are hemmed in by government restrictions on cash transactions.

“I’m going to China next month to explain to people that bitcoin is the easiest way to pay for things outside the country,” Ver said during a meeting this month at the plush 51st floor lounge of Tokyo’s Roppongi Hills.

Trader, Hacker, Boxer

A trim 35-year-old with a crew cut, in a black polo shirt and slacks, Ver looked a little like an electronics salesman at a big-box retailer. Still, a crowd of followers hung on his every word. A former derivatives trader at Goldman Sachs Group Inc., a hacker, and a professional boxer were all there to pitch ideas or talk bitcoin with the master.

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Ver got rich investing in bitcoin early and has become a regular speaker at industry conferences. He’s provided seed funds for a dozen prominent startups including Kraken, an exchange where people buy and sell the digital currency, and Blockchain, an online wallet used to store it.

Bitcoin was invented in 2008 as a currency that could be used without government oversight. That’s drawn people who want to trade illicit goods like drugs and guns. It’s also gained support from libertarians like Peter Thiel, the billionaire co-founder of PayPal who plans to build an artificial island where people can do whatever they want. Ver’s passport site, his latest venture, is a scaled down version of that ideal.

Evade Taxes

“St. Kitts’ government is much more libertarian compared with the U.S.,” Ver said. “It’s not even close. So all these early bitcoin adopters, of course if they have the means, they’d rather be a citizen of St. Kitts.”

However they pay to get in, people usually seek out countries like St. Kitts so they can evade taxes, says John Christensen, director of the Tax Justice Network. The U.S. Treasury Department last month said the island’s passports are being used to facilitate financial crime.

“To be blunt, we talk about places like St. Kitts as places where you go to escape from responsibilities,” Christensen, an expert on tax havens, said by phone from London. “St. Kitts sells secrecy on the international market and, unsurprisingly, attracts all types of dirty money.”

Gaining Citizenship

Erasmus Williams, press secretary for St. Kitts, didn’t respond to phone calls or e-mailed questions about the Citizenship-By-Investment program.

A woman who answered the phone at the Office of the Prime Minister said the program is “not a matter of buying passports, it’s about gaining citizenship.”

Nonetheless, no residency or visit is needed, just that $400,000 investment -- re-sellable after five years -- or a non-refundable $250,000 donation to the country, according to St. Kitts’s official website.

For those who don’t get the message the first time, the site repeats in bold print: “No personal visit required.”

Still, wealthy Chinese have a tough time buying in because government limits on money transfers stop them from sending more than $50,000 worth of cash overseas each year.

“The processing agent in St. Kitts told me he feels bad for all of his Chinese clients,” Ver said. “They have to reach out to all different friends and relatives and get them to all send the money in drips and drabs. Bitcoin solves all of that.”

Anonymous Ledger

That’s because it was designed to be anonymous. While an online public ledger stores every single Bitcoin transaction, the entries don’t include the names and addresses required for bank accounts.

In practical terms, a person in Beijing can buy bitcoins at home through BTC China, OKCoin or numerous other exchanges. With a few swipes on a smartphone, the money can then be beamed to St. Kitts with no government on Earth the wiser.

The U.S. lost its allure for Ver after he was sentenced to 10 months in federal prison after selling about 14 pounds of explosive without a license on the EBay auction site. The product, “Pest Control Report 2000,” was basically a firecracker to scare birds away from cornfields, Ver says.

Locked Up

“I didn’t do anything wrong. I didn’t hurt anybody. I had nothing but happy customers and the U.S. government locked me in a cage because of that,” he said. “So I want nothing to do with those people. I don’t want to support them. I want them out of my life.”

Ver moved to Tokyo after finishing probation in 2006. He got his St. Kitts passport on Feb. 13, 2014, and abandoned his U.S. citizenship by the end of the month.

“I would have done it the same day if I could,” he said. “They told me I had to have a one-week cooling-off period. They said, ‘Did you know if you renounce citizenship, you won’t be able to serve in the armed forces?’ It was like, ‘darn.’”

The U.S. is unusual in taxing its citizens no matter where they live. Recent laws requiring disclosure of foreign bank accounts has driven up the number of wealthy Americans looking to sever ties with home. A record 2,999 renounced their citizenship in 2013.

Although Ver’s computer parts business made him a millionaire by the time he was 25, the real money came after he bought tens of thousands of bitcoins in 2011. They cost about $1 each then. Today they trade at about $600, according to the CoinDesk price index.

Bitcoin Evangelist

Ver said he earned his moniker, Bitcoin Jesus, by telling anyone who would listen about bitcoin well before other venture capital companies paid any attention to the digital currency.

One of the people who got a dose of Ver’s sermons was the agent who processed his application for citizenship, Paul Bilzerian. Bilzerian is a former corporate raider who moved to St. Kitts after long battles with the U.S. Securities and Exchange Commission and two stints in prison for securities fraud and conspiracy to defraud the government of millions.

The two men bonded over the belief they’d been targeted by U.S. authorities, according to Ver. Together, they started passportsforbitcoin.com in April, Ver said.

Bilzerian, who is one of several-dozen licensed government processers in St. Kitts, declined to comment in an e-mail.

Their website says a second passport insulates you from governments that intrude on citizen’s lives. The site also has testimonials from Ver and Bilzerian’s son, Dan, a 30-something professional poker player with millions of followers on Instagram, where he posts pictures of himself with half-naked women, along with his gun collection. He didn’t respond to e-mailed questions forwarded through his press agent.

“I value freedom more than almost anything else and a second or third passport provides me insurance just in case the U.S. government decides to value security over freedom,” Bilzerian’s son writes on the passport website.

To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net Peter Langan, Peter Elstrom

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