Texas investor ordered to submit keys to $124m Bitcoin fortune

A Satoshi-era Bitcoin buyer must surrender crypto keys to his $124 million stash, a Texas court ruled following a landmark conviction last year.

U.S. District Judge Robert Pitman has ordered early crypto investor Frank Richard Ahlgren III to turn over the private keys to his Bitcoin (BTC) wallet and any other relevant digital asset storage devices.

Private keys are an encryption system that safeguards crypto wallets, giving the holder full access and control.

Judge Pitman’s order also blocked Ahlgren and any of his proxies from moving cryptocurrencies or concealing digital assets from the court. Although Ahlgren can finance his monthly living costs with crypto, the court’s decision is aimed at unlocking approximately $124 million in digital assets attributed to Ahlgren and recovering $1 million in court-approved damages, according to Bloomberg.

Ahlgren’s Bitcoin tax fumble

Ahlgren’s name has become synonymous with the first U.S. crypto tax evasion case following his formal sentencing in late December. Federal prosecutors issued a seven-charge indictment against the BTC investor, alleging he falsely reported capital gains from a $3.7 million BTC sale and deliberately evaded taxes.

According to the Department of Justice, Ahlgren, also known by his alias “Paco,” tried to hide his blockchain footprint using sophisticated financial tactics.

While the Bitcoin blockchain is public and immutable, some protocols allow users to obscure their transactions to a degree, the DOJ emphasized in a statement at the time. After a lengthy investigation and months-long trial, a Texas District Court sentenced Ahlgren to two years in prison.