A Texas judge ordered a bitcoin investor to keep the keys for $124 million

A federal judge issued an early ruling Bitcoin The investor handed over encryption keys that could unlock about $124 million in crypto, an unprecedented move in the US government’s efforts to seize digital assets in tax evasion cases.

According to an order issued Monday by U.S. District Judge Robert Pittman, Ahlgren must disclose everything. private keys and identify any devices you use to store crypto, e.g hardware wallets.

In addition to access to the wallet, the order prohibits Ahlgren and any associates from transferring or hiding digital assets without court approval, but they can use the funds for “monthly living expenses.”

The order is intended to help Ahlgren pay nearly $1 million in restitution after his December conviction. An early depiction of the order appeared for the first time Bloomberg.

Avoiding taxes with crypto? Not so fast

Last February, federal prosecutors released The seven-count indictment against Richard Ahlgren III, known as “Paco,” targets crypto trading, marking the first US criminal tax evasion case.

The Austin, Texas man faces three counts of filing a false tax return and four counts of unlawfully structuring cash deposits. Ahlgren was until last December sentenced to two years He was jailed for falsely reporting his $3.7 million in bitcoin sales.

Acting Deputy Assistant Attorney General for the Tax Division of the Department of Justice Stuart M. a DOJ press release in case.

Ahlgren “attempted to hide another portion of his income by using sophisticated techniques designed to disguise his transactions on the bitcoin blockchain,” Goldberg said.

The indictment describes in detail how Bitcoin transactions work, and explains that while the blockchain was public, Ahlgren attempted to conceal his activities through several methods.

Decryption The DOJ has been contacted and will update this article if they respond.

Set a precedent

What makes Ahlgren’s work so innovative is his focus on sophisticated efforts to deliberately manipulate crypto-value-based calculations and obfuscate blockchain transactions, effectively creating a future playbook. crypto taxation.

US regulators are cracking down as Congress struggles to create a clear regulatory framework for crypto assets by 2024. look through From blockchain forensics firm Elliptic suggests.

At least until significant changes are made to crypto laws, the U.S. remains a “challenging regulatory environment for crypto market participants” due to “the lack of progress in crypto market legislation” and “heavily reliant on the crypto market” regulatory position” added. enforcement measures,” it was reported.