U.S. Court Orders Bitcoin Investor To Surrender Crypto Keys

According to ShibDaily, early cryptocurrency investor Frank Richard Ahlgren III has been ordered by U.S. District Judge Robert Pitman to surrender the private keys to his Bitcoin wallet and other digital asset storage devices. This court order follows Ahlgren’s conviction for tax fraud in December 2024, which resulted in a two-year prison sentence. The case is notable as it marks the first U.S. criminal tax evasion prosecution focused solely on cryptocurrency trading. Judge Pitman's order not only demands access to Ahlgren’s crypto wallets but also prohibits him and his associates from transferring or concealing any digital assets without prior court approval. However, they are allowed to use funds for "normal monthly living expenses." The court aims to access approximately 69,370 BTC, valued at $124 million, linked to Ahlgren, while recovering $1 million in court-ordered damages. Ahlgren, who operated under the alias "Paco," was indicted on seven charges related to tax fraud in February 2024. These charges included three counts of filing false tax returns and four counts of illegal structuring of cash deposits. He was accused of concealing $3.7 million in capital gains from Bitcoin sales to evade taxes. The Department of Justice alleges that Ahlgren used advanced financial methods to hide his activities on the blockchain. Despite the public and unchangeable nature of the Bitcoin blockchain, certain protocols can obscure transactions to some extent. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division stated in a December 2024 press release that Ahlgren lied to his accountant about the extent of his gains and sought to conceal a significant portion of his profits. The case has raised important questions about the intersection of digital assets and tax regulation, with experts suggesting it could set a precedent for future cases involving cryptocurrency-related tax evasion. Ahlgren’s legal team has expressed frustration with the handling of the case, particularly the DOJ’s use of civil asset forfeiture to seize the assets. This court decision is part of broader efforts by U.S. authorities to crack down on financial crimes involving cryptocurrency, as the sector faces increasing scrutiny and regulatory attention.