Obligation to hand over all physical devices used to store cryptocurrencies and over $1 million to be returned to the US tax authorities.
In a ruling that sets a precedent in the digital asset landscape, a federal court in Texas has ordered Frank Richard Ahlgren III to hand over all the private keys and access codes of his wallets. The decision represents a turning point in the relationship between the American justice system and the world of cryptocurrencies.
Last December, Ahlgren, an investor who had purchased about 1,366 bitcoins in 2015 when the price was around $465, was sentenced to two years in prison for tax evasion. The case emerged after the defendant deliberately understated the capital gains earned from the sale of bitcoins worth over $3.7 million between 2017 and 2019.
Judge Robert Pitman of the Federal Court in Austin issued a restraining order that not only involves Ahlgren but also extends to family members and associates, mandating the identification and handover of all physical devices used to store cryptocurrencies, along with public and private keys and seed phrases. The order includes a ban on transferring any cryptocurrency without prior authorization from the court.
In 2017, Ahlgren sold about half of his bitcoins at $5,800 each, artificially inflating the purchase price on his tax return to reduce the taxable capital gain. Later, between 2018 and 2019, he sold additional bitcoins for over $650,000, failing to report these sales.
The sentence includes, in addition to the two years of imprisonment, one year of probation and the payment of about $1.1 million in restitution to the US government.
The order will remain in effect until Ahlgren has met all the restitution obligations ordered by the court or until further notice from the court.
