Frank Richard Ahlgren III, a.k.a. the early Bitcoin investor who was recently convicted, is now facing two years to serve in prison after failing to report what he fully gained in his transactions in cryptocurrency. It was revealed that Ahlgren III earned as much as $4 million after successfully selling his Bitcoin assets which he got almost a decade ago, being one of the earliest investors of the top coin.
Back when Ahlgren III sold his initial Bitcoin assets, he already gained around $3.7 million which he falsified in his income tax return, hiding his true capital gains from his cryptocurrency earnings according to the US DOJ.
Early Bitcoin Investor Now Faces Two Years in Prison, $1.1M Fine
The United States Department of Justice recently shared that they have convicted and sentenced an Austin, Texas, man named Frank Richard Ahlgren III to two years in prison for his crimes. Ahlgren III also faces a $1.1 million fine in restitution for his tax evasion case, alongside a one-year supervised release after serving his two years behind bars in this landmark prosecution against the crypto industry.
According to Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department's Tax Division, Ahlgren III earned millions in crypto earnings, "But instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains, and sought to conceal another chunk of his profits through sophisticated techniques designed to obscure his transactions on the bitcoin blockchain."
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Ahlgren III Earned $4M in Crypto Capital Gains For BTC Sold
After purchasing approximately 1,366 Bitcoins in 2015 via Coinbase's exchange for almost $500, Ahlgren III kept the coins and decided to sell 640 of these from 2017 to 2019 for $5,807.53 per coin. The early BTC investor reportedly earned $3.7 million from this transaction which he did not declare.
Acting Special Agent in Charge Lucy Tan of IRS-Criminal Investigation (IRS-CI)'s Houston Field Office said "This case marks the first criminal tax evasion prosecution centered solely on cryptocurrency." The US DOJ makes a stern announcement to the public that all taxpayers are required to declare their crypto earnings and losses in their tax returns.
Early Bitcoin Predictions and State Now
Earlier this year reports about the real identity of Bitcoin's creator, Satoshi Nakamoto, an alias, surfaced online when a first adopter of BTC shared alleged emails with the real creator of the top coin. According to Martii "Sirius" Malmi, who was a BTC developer who worked with Nakamoto, the creator previously predicted that Bitcoin would blow up in the future, especially with the scrutiny cryptocurrency was about to face with its mining power consumption.
Most recently, Bitcoin reached its biggest valuation to date, and it was able to reach the $100,000 threshold which is one of the top predictions by analysts, experts, and fans who want the top coin to succeed. BTC came a long way from this $100k valuation, particularly as going back 15 years ago, the top cryptocurrency has a similar valuation to meme coins which is about one-tenth of a single centavo.
There have been many fortunate early investors of Bitcoin as they are now seeing their money's worth to the coin as it surged as much as 140 percent this year thanks to the recent efforts behind it, including the support from President-elect Donald J. Trump. However, it does not excuse a person to falsify their tax returns and fail to declare their crypto gains, with Ahlgren III being the landmark case against cryptocurrency tax evasion.
