Bitcoin Investor Must Hand Over Keys to $124 Million Crypto Cache
A federal judge has ordered an Austin Bitcoin investor to surrender passcodes to unlock cryptocurrency worth about $124 million, following his two-year prison sentence last month for tax fraud.
Frank Richard Ahlgren III must disclose the codes and identify storage devices for digital assets he allegedly moved through a cryptocurrency mixing service in 2020, US District Judge Robert Pitman ruled on Monday in Austin.
Ahlgren, who became the first American convicted of tax crimes solely related to cryptocurrency sales, was sentenced in December. He agreed to pay $1 million in restitution to cover tax losses from underreporting capital gains on $3.7 million in Bitcoin sales.
Federal prosecutors sought the court order in December to locate approximately 1,287 Bitcoin that Ahlgren transferred through a “mixing” service, which obscured the tokens’ trail. The value of these assets has more than doubled over the past year.
The judge’s order prohibits Ahlgren from transferring or selling any property without court approval, though he may continue to cover normal living expenses. Prosecutors emphasized in their request that cryptocurrency “cannot be attached by ordinary physical means” and warned that losing the private keys would make the virtual currency irretrievable.
“We will comply with a court directive,” said Dennis Kainen, Ahlgren’s attorney, noting they might seek clarification from the court if needed.
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