EddieJayonCrypto
8 Jan 25
A federal judge has ordered an early Bitcoin investor to surrender encryption keys to unlock approximately $124 million in crypto. The order, issued by U.S. District Judge Robert Pitman, also prohibits the transfer or hiding of digital assets without court approval. This unprecedented move is part o...
A federal judge has ordered an early Bitcoin investor to surrender encryption keys to unlock approximately $124 million in crypto, marking an unprecedented move in the U.S. government's efforts to seize digital assets in tax evasion cases. The order, issued by U.S. District Judge Robert Pitman, also prohibits the transfer or hiding of digital assets without court approval. The investor, Richard Ahlgren III, was convicted for falsely reporting capital gains from Bitcoin trading, resulting in a two-year prison sentence. This case sets a precedent for deliberate manipulation of crypto cost basis calculations and attempts to obscure blockchain transactions in the face of regulatory challenges in the U.S. The order extends beyond just wallet access—Ahlgren and any associates are prohibited from transferring or hiding any digital assets without court approval, though they can use funds for "normal monthly living expenses." The order aims to help recover about $1 million in restitution following Ahlgren's December conviction. This case is groundbreaking as it focuses on the deliberate manipulation of crypto cost basis calculations and sophisticated attempts to obscure blockchain transactions, effectively creating a playbook for future crypto tax enforcement amidst regulatory challenges in the U.S. U.S. regulators are taking an enforcement-heavy approach while struggling to establish clear regulatory frameworks for crypto assets. This is occurring as a 2024 industry review suggests that the U.S. "remains a challenging regulatory environment for crypto market participants."