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Phillip J. Murphy Attorney at Law New City Criminal Defense Attorney
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Serious Consequences For Using Crypto For Tax Evasion


While many crypto enthusiasts claim that Web3 offers the potential for tax evasion, it also offers a clear potential for legal consequences. A number of recent cases highlight a renewed effort to crack down on crypto-related crimes, and the recent Sam Bankman-Fried conviction is only one example. With each passing week, new crypto enthusiasts face criminal charges for a range of offenses – including tax evasion.

United States Seizes More than $54 Million in Crypto

While the consequences of tax evasion schemes are certainly serious, the government may also seize any cryptocurrencies linked to this activity. This has the potential to lead to millions of dollars in lost money, especially if the crypto increases in value over many years.  On November 2nd, the Justice Department announced that the government had seized more than $54 million in cryptocurrencies linked to both narcotics trafficking and tax evasion.

In 2010, a New Jersey-based defendant began selling narcotics. Three years later, he and his co-conspirators began selling drugs on darknet sites – accepting Bitcoin as payment. Later, he converted these Bitcoins to Ether when the latter was first offered in 2014. He then increased his Ether holdings over the years while buying other “altcoins.”

Eventually, he was arrested and convicted of crimes related to his narcotics operation. During his time in prison, he apparently plotted to move his Ether outside of the country to avoid potential taxes – using telephone calls to instruct others on how to move these funds. Unfortunately for the defendant, the authorities were apparently listening in – and they were able to intercept and seize the Ether. Since the initial coin offering, the defendant’s Ether had risen to a value of $54 million.

It is likely that the police had no idea where these funds were until the defendant provided certain information over the phone (probably his wallet ID and wallet password).

Crypto Founder Sentenced to Four Years for Tax Crimes

Even those who operate legitimate crypto-related businesses can experience criminal consequences for tax crimes. This was made clear by the Justice Department on October 31st of 2023, when they announced that “Bruno Block” had been sentenced to four years in prison for tax crimes. He had apparently minted Pearl crypto tokens for his own gain in secret – which caused the value of Pearl to nosedive. In connection with this scheme, Bruno did not pay income tax on certain crypto-related profits – causing a tax loss of over $5.5 million.

Where Can I Find a Qualified, Experienced Defense Attorney in New Jersey?

If you’ve been searching for a qualified, experienced New Jersey criminal defense attorney, look no further than Phillip J. Murphy, Attorney at Law. Over the years, we have helped numerous defendants in the Garden State. Tax evasion allegations can be incredibly serious. The sooner you get started with a defense strategy, the better. Book your consultation today to discuss the most appropriate course of action.


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