Early Bitcoin Investor Jailed for Unreported Crypto Gains!

An early Bitcoin investor from Austin, Texas, Frank Richard Ahlgren III, became the first person criminally charged for failing to report crypto capital gains, involving approximately $4 million worth of cryptocurrencies.

According to the U.S. Department of Justice (DOJ), Ahlgren “falsely underreported the realized capital gains” from selling Bitcoin worth $3.7 million between 2017 and 2019. The DOJ stated on December 12 that “all taxpayers are required to report any sale proceeds and gains or losses from the sale of cryptocurrency, such as Bitcoin, on a tax return.”

Ahlgren, who had invested in Bitcoin since 2011, bought 1,366 BTC on Coinbase in 2015 when Bitcoin was priced under $500. He later sold about 640 BTC in October 2017 at an average price of $5,807.53 and reinvested the $3.7 million in real estate. Authorities discovered discrepancies in his 2017 federal income tax return, where Ahlgren inflated the cost basis of his Bitcoin holdings, thus underreporting his true capital gain.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Additionally, Ahlgren failed to report more than $650,000 in Bitcoin sales in 2018 and 2019. The DOJ indicated that he attempted to hide the movement of his funds using wallet transfers, crypto mixers, and cash transactions. Notably, in May 2014, Ahlgren had blogged about using mixers for Bitcoin transactions.

The criminal tax evasion case culminated in a two-year prison sentence for Ahlgren, making it the first criminal tax evasion prosecution focused solely on cryptocurrency. The Internal Revenue Service’s Criminal Investigation Houston Field Office stated that Ahlgren’s belief that his crypto transactions were untraceable led to his conviction.

In addition to the prison sentence, Ahlgren was ordered to pay $1.1 million in restitution to the U.S. government and serve one year of supervised release.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.