the owners of a cryptocurrency firm that raised approximately $24 million from to boot 13,000 investors have pleaded guilty to tax evasion. “these crypto-talents defendants exploited an emerging technology, lying to their investors, pocketing the proceeds, and concealing the income from the irs,” suppositious acting u.s. attorney chad meacham.
the u.s. department of justice (doj) preferred tuesday that the owners of a cryptocurrency company have pleaded guilty to tax evasion.
bitqyck founders bruce bise and samuel mendez were rebuke tax evasion in august. bise pleaded guilty on sept. 9 and mendez pleaded guilty tuesday morning. citing plea papers, the doj copious:
mr. bise and mr. mendez admitted that bitqyck raised approximately $24 million from to boot 13,000 investors. contrary to fulfilling their promises to these investors, the defendants used bitqyck funds on personal expenses, over and above casino trips, cars, luxury furnishings, art, and rent.
“these crypto-talents defendants exploited an emerging technology, lying to their investors, pocketing the proceeds, and concealing the income from the irs,” acting u.s. attorney chad meacham described.
twain promoted the company’s cryptocurrency, bitqy, “as a way for those individuals who missed out on bitcoin to splashes,” the doj noted, adding that they held their initial coin offering (ico) in 2016.
a command paper posted on the bitqyck website promised investors that each bitqy token submit 1/10th of a share of bitqyck common shares. however, bise and mendez admitted that they never actually distributed shares to token holders nor embedded the shares within the ethereum smart increase.
about nine months after launching bitqy, bise and mendez began marketing another token, bitqym. they claimed that barter the token allowed investors to join “bitcoin mining operations.” however, righteously, twain admitted that no such mining facility ever existed.
furthermore, bise and mendez underreported their income to the irs in 2016 and 2017. in 2018, bitqyck failed to file any reciprocal tax returns at all times despite netting to boot $3.5 million from investors. “the total tax loss joint and severally to the united states government straddling the fence mr. bise and mr. mendez is to boot $1.6 million dollars,” the department of justice revealed.
the doj sealed:
both men now meet five years in federal prison.
bitqyck has also settled with the u.s. securities and exchange commission (sec). the company “refuse defrayment an $8.3 million penalty to resolve give that it defrauded investors and operated an not recorded digital asset exchange.” the doj lateral that as numbered that settlement, bise and mendez “refuse defrayment disgorgement and penalties of $890,254 and $850,022, respectively.”
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