A federal court in Texas has issued a significant ruling in a cryptocurrency-related tax case. Frank Richard Ahlgren III, an early Bitcoin investor, has been ordered to hand over his cryptocurrency public and private keys, along with any wallet access codes, to the government. This ruling comes as part of a broader restraining order following Ahlgren’s two-year prison sentence for tax fraud. He has been found guilty of misrepresenting capital gains on over $3.7 million from Bitcoin sales conducted between 2017 and 2019, resulting in a restitution amount of approximately $1.1 million owed to the U.S. government.
Judge Robert Pitman of the Austin Federal Court mandated that Ahlgren and any of his associates disclose all devices used for storing cryptocurrency. This includes providing access to any relevant crypto accounts such as Bitcoin, Bitcoin Cash, Bitcoin Gold, Ether, and Litecoin. The judge has also prohibited any movement of Ahlgren’s digital assets without court approval, with exceptions for necessary monthly living expenses. This order is to remain effective until Ahlgren fulfills his restitution obligations or receives further instruction from the court.
Ahlgren’s guilty plea in September 2024 was for filing a false tax return. This conviction is notably the first criminal tax evasion case in the United States to focus exclusively on cryptocurrency activities, as highlighted by the acting special agent in charge of the IRS-Criminal Investigation’s Houston office. During the trial, it was revealed that Ahlgren had employed multiple wallets and other means to obscure the true nature of his cryptocurrency transactions, leading to over $1 million in tax losses. Besides the prison term, he faces an additional year of supervised release.
