In a petition filed in California federal court on Dec. 3, Ver argued that the Internal Revenue Service’s (IRS) “exit tax” on people with more than $2 million in assets who renounce U.S. citizenship is unconstitutional and “incomprehensibly vague.”

In his petition, Ver claimed that this exit tax violated the Apportionment Clause and Due Process Clause of the Constitution. He also noted that the IRS’s application of taxation provisions to digital assets was highly unclear at all relevant times.

Ver’s lawyers argued that the exit tax was unconstitutional and that new financial instruments such as digital assets should be regulated in compliance with tax laws.

The IRS’s exit tax aims to prevent U.S. citizens from giving up their citizenship without fulfilling their tax obligations in the United States. However, Ver argued that the tax laws imposed by the government are unclear and complex for digital assets.

Additionally, Ver alleged that prosecutors illegally interrogated an attorney and ignored required documents based on allegations that he filed false tax returns. Ver stated that he had no intention of actually committing tax evasion.

Ver’s arrest and charge were based on tax evasion related to the sale of Bitcoin. On April 30, the U.S. Attorney’s Office in Los Angeles arrested Ver in Spain and charged him with tax evasion and fraud.

It is claimed that Ver evaded more than $48 million in taxes on $240 million in income he earned by selling “tens of thousands” of Bitcoins. However, Ver said that it is difficult to properly file an exit tax at this time due to Bitcoin’s liquidity shortcomings.

Ver renounced his US citizenship and became a Japanese citizen in 2014, and then continued to advocate for Bitcoin and cryptocurrencies. Ver, an early investor in Bitcoin, bought it at very low prices in 2011 and over time became an advocate of digital assets.

He was also a proponent of the Bitcoin Cash (BCH) project and became a big supporter of BCH after a hard fork in the Bitcoin network in 2017. However, a 2022 scandal with CoinFlex came to the fore with claims that Ver owed $47 million USD Coin.

Ver’s defense doesn’t just focus on individual tax evasion charges; It also raises a broad debate about the taxation of digital assets.

It is stated that as digital assets become more widespread, the regulations and tax laws regarding such assets need to be clarified. Ver argues that the US government’s accusations against him are part of a system that has an unclear and incompatible approach to digital assets.

Ver faces up to 30 years in prison if convicted. However, how the hearings and litigation process will be shaped may also reveal the uncertainties over the tax laws and regulations of digital assets.