Frank Richard Ahlgren III, an investor from the Satoshi era, was sentenced to two years in prison for underreporting capital gains derived from selling $3.7 million worth of Bitcoin. This case marks the first criminal prosecution in the U.S. focused solely on cryptocurrency tax evasion. Ahlgren purchased Bitcoin in 2011, shortly before the Bitcoin creator stepped back from public view. He sold his assets between 2017 and 2019, totaling $4.35 million, but misrepresented these figures to his accountant and on his tax filings. The IRS calculated Ahlgren’s tax loss at over $1 million. To obscure his transactions, he employed sophisticated techniques such as converting Bitcoin to cash through in-person exchanges and manipulating the purchase price of Bitcoin to lower his tax liability. Ahlgren received a two-year prison sentence, one year of supervised release, and was ordered to pay over $1 million in restitution. This case emphasizes the importance of tax compliance in the cryptocurrency space, as authorities increase their scrutiny of blockchain transactions.

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