Texas court orders Bitcoin investor to disclose $124 million in crypto keys

Frank Richard Ahlgren III, an early adopter of Bitcoin (BTC), has been directed by a Texas court to relinquish access to his crypto wallets, BNN Bloomberg reported on Jan. 7.

According to the report, Ahlgren was ordered to provide the private keys, seed phrases, and any devices used to store his digital assets. This comes as part of legal proceedings tied to tax evasion charges.

Judge Robert Pitman also restricted Ahlgren’s close associates from transferring or reducing the value of his crypto holdings without court approval. Only essential monthly living expenses are exempted from this restriction.

The crime

Ahlgren entered the Bitcoin space in 2011 but gained regulatory attention for activities starting in 2015. That year, he purchased approximately 1,366 BTC through Coinbase when Bitcoin’s peak price was around $495.

By 2017, he sold 640 BTC for $3.7 million, using most of the proceeds to buy a property in Park City, Utah. However, he falsified his tax returns by claiming exaggerated purchase prices far above market value.

In 2018 and 2019, Ahlgren sold additional Bitcoin worth over $650,000 but failed to disclose these transactions to the IRS.

Furthermore, he employed techniques like transferring funds through multiple wallets, using cash exchanges, and leveraging Bitcoin mixers to obfuscate his transactions.

In September 2024, Ahlgren pleaded guilty to the charges and received a two-year prison sentence. Following his release, he will also face a one-year period of supervised monitoring and pay restitution of $1 million.

Legal implications

The case highlights significant legal risks for crypto investors. Bill Hughes, an attorney with blockchain firm Consensys, remarked that while self-custody empowers users, governments retain the authority to seize digital assets for tax violations.

He stressed the importance of adhering to tax laws, warning that failure could lead to severe consequences, including asset forfeiture and imprisonment.

Acting Special Agent Lucy Tan of the IRS Criminal Investigation echoed this sentiment. She noted that the allure of crypto’s high value often tempts individuals to evade taxes. However, the penalties are clear, as non-compliance can result in federal prison.

She added:

“Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable. This case demonstrates that no one is above the law.”

The post Texas court orders Bitcoin investor to disclose $124 million in crypto keys appeared first on CryptoSlate.

  • Related Posts

    Bitcoin’s rise turns 2017 theft into multimillion-pound scandal for UK officer

    British authorities have charged National Crime Agency (NCA) officer Paul Chowles with multiple offenses related to the alleged theft of 50 Bitcoin in 2017. At the time of the alleged…

    Continue reading
    Bitcoin outperforms tech stocks as US market opens to sea of green

    The US stock market has opened to a sea of green on seemingly minor news. While President Trump’s call to Vladamir Putin to end the war in Ukraine could be…

    Continue reading

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Bitcoin’s rise turns 2017 theft into multimillion-pound scandal for UK officer

    Bitcoin’s rise turns 2017 theft into multimillion-pound scandal for UK officer

    Bitcoin outperforms tech stocks as US market opens to sea of green

    Bitcoin outperforms tech stocks as US market opens to sea of green

    Solana governance sets new participation record outpacing past US presidential elections

    Solana governance sets new participation record outpacing past US presidential elections

    Trump-backed DeFi project WLFI closes raise surpassing goal reaching $590 million

    Trump-backed DeFi project WLFI closes raise surpassing goal reaching $590 million

    Russian oil firms use Bitcoin, Ethereum, USDT for cross-border payments with China and India

    Russian oil firms use Bitcoin, Ethereum, USDT for cross-border payments with China and India

    Vermont withdraws action against Coinbase, awaits SEC’s regulatory clarity

    Vermont withdraws action against Coinbase, awaits SEC’s regulatory clarity