The U.S. Department of Justice (DOJ) announced on Thursday that an early Bitcoin investor pleaded guilty to "filing false tax returns that misrepresented his cryptocurrency income." Frank Richard Ahlgren III, a Texas resident, admitted to underreporting capital gains from the sale of $3.7 million worth of Bitcoin.

According to court documents, Ahlgren purchased 1,366 Bitcoin in 2015, at a price of less than $500 each. In October 2017, he sold 640 Bitcoin for approximately $3.7 million and used the proceeds to purchase a house in Park City, Utah. However, Ahlgren's 2017 tax return falsely reported the cost basis of his Bitcoin, resulting in an underreporting of capital gains. Additionally, he failed to report $650,000 in Bitcoin sales from 2018 and 2019.

The DOJ emphasized that all taxpayers must report any sales proceeds from cryptocurrency sales and any gains or losses.