Pioneering Bitcoin Investor Gets Up to 3 Years in Prison for Tax Evasion
Frank Richard Ahlgren III, an early investor in Bitcoin, has pleaded guilty to tax evasion in the United States. He deliberately understated his earnings on his IRS tax returns, using tactics such as inflating the cost of acquiring Bitcoin to reduce the amount he owed.
Hidden Transactions and Benefits Obtained
• Initial Purchase (2015): Purchased 1,366 BTC for around $500 each.
• Profitable Sales (2017): Sold 640 BTC at an average price of $5,807 each, generating approximately $3.7 million.
• New Sales (2018-2019): An additional US$650,000 in undeclared sales were made.
• Use of Profits: Part of the funds were used to purchase a house in Utah, raising suspicions about the origin of the money.
Penalties provided for
• Imprisonment: The maximum sentence can be up to three years.
• Restitution and Fines: He will be required to repay more than $550,000 to the government and could face post-release supervision.
• Pending Sentence: The final judgment has not yet been announced.
Lessons for Investors
Ahlgren’s case serves as a warning to those who trade cryptocurrencies. The growing value and popularity of these assets has attracted the attention of tax authorities around the world, including in Brazil, where the Federal Revenue Service has stepped up its monitoring of digital transactions. Failure to comply with tax obligations can result in severe fines and even imprisonment.