Bitcoin investor Frank Richard Ahlgren III has been arrested by United States authorities over crypto tax-related offenses. According to reports, the Bitcoin investor has been sent to prison for two years, with authorities also ordering him to surrender the passcodes to his $124 million worth of crypto stash.
According to the filing charges in Ahlgren III’s case, he was accused of using mixing services to hide 1,287 BTC, worth $124 million. He pleaded guilty to underreporting capital gains worth $3.7 million from his Bitcoin transactions. As a result, he has been ordered to pay $1 million in tax loss reparation to the United States government.
Prosecutors want the court to monitor Ahlgren III’s transactions
Prosecutors in the case urged the court to issue an order for Ahlgren III’s passcodes. This is because they feel his property cannot be attached by physical means. So, if the court issues the orders, it can stop anyone from moving any digital asset from the cache. They claimed that once the passcodes are lost or destroyed, then nobody can access the assets.
The United States District Judge of the Western District of Texas, Robert Pittman accepted the prosecutor’s plea, approving it. He ordered the Bitcoin investor to surrender the passcodes and any other devices that he might have used to store the assets. In addition, he was asked to disclose all other wallets he used to store digital assets.
According to the ruling, the Bitcoin investor is not allowed to dispose of or transfer any property unless approved by the courts. He is also not allowed to make any frivolous spending aside from his usual monthly routine.
Bitcoin investor agrees to abide by court rulings
The Bitcoin investor through his attorney Dennis Kainen has informed the court that he is willing to follow the verdict. He was sentenced on December 12, months after he pleaded guilty to underreporting capital gains on September 12. “We will comply with a court directive, or to the extent that we have a question, we will direct it to the court. We appreciate Judge Pitman’s care throughout this case,” the attorney said.
With his charge and the subsequent ruling, the case has set a precedent that could affect even smaller crypto holders. The government has always gone after the bigger players, convicting them of several crypto-related offenses, and now it looks like the smaller fishes would now be affected.
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