Satoshi-era Bitcoin investor Frank Ahlgren III received two years in prison for evading taxes on $4.35 million in Crypto profits.
This conviction marks a U.S. first for crypto-related tax evasion.
Suchir Balaji, a former OpenAI researcher who exposed the company's alleged illegal data practices, was found dead in his San Francisco apartment.
So far, authorities believe that Balaji's death resulted from suicide, in the absence of further evidence.
Kraken was fined $5.1 million for "knowingly" offering risky margin trading products to retail investors without proper safeguards.
Last week was a busy one for the Crypto industry.
Bitcoin crossed the $100,000 mark twice in a rollercoaster ride that pulled the altcoin market up and down.
However, amid the issues with price, the Crypto industry itself also went through a wild ride of crime, fines, punishment, and even suicides over the last week.
Here’s a closer look at some of the biggest stories that shaped the whole of last week.
Before last week, there had never been a case of someone being jailed for criminal tax evasion in the U.S. regarding crypto.
However, in a historic first for the country, Frank Richard Ahlgren III, a Satoshi-era Bitcoin investor, was sentenced to two years in prison for tax evasion.
Per reports, Ahlgren purchased his Bitcoin stash in 2011 and sold his holdings between 2017 and 2019 for $4.35 million.
However, he misrepresented his profits in tax filings in a bid to evade payment.
But this was no mere tax evasion case.
According to the U.S. Department of Justice, Ahlgren reportedly used several methods to hide his capital gains, including trading Bitcoin for cash in person and using crypto mixers to hide his trail.
He also reportedly inflated his Bitcoin purchase price to lower his taxable income.
In total, Ahlgren's actions cost the U.S. government a total of $1 million in tax losses.
Despite making millions from Crypto, Ahlgren only reported $3.7 million of his sales, misleading both his accountant and the IRS.
The accused now faces two years in prison, one year of supervised release, and a restitution payment of $1,095,031.
Last week, Suchir Balaji, a 26-year-old former OpenAI researcher, was found dead in his apartment on 26 November after police and medical personnel were called to his home to do a wellness check.
Authorities, so far, have found no evidence of a struggle and have ruled that Balaji died in a suicide.
Earlier this year, the deceased gained attention for whistleblowing on OpenAI’s “illegal” data practices.
He reportedly accused the AI company of illegally obtaining data to train its AI models, including ChatGPT.
He revealed to the New York Times that the company had developed transcription software to scrape data from platforms like YouTube without gaining consent through the proper channels.
These allegations came amid several lawsuits against generative AI companies, including a high-profile case filed by The New York Times in December 2023.
In an October Tweet, the deceased
In an October social media post, Balaji expressed his skepticism about how these AI models are being trained, saying:
“I was at OpenAI for nearly 4 years and worked on ChatGPT for the last 1.5 of them. I initially didn't know much about copyright, fair use, etc. […]
"When I tried to understand the issue better, I eventually came to the conclusion that fair use seems like a pretty implausible defense for a lot of generative AI products."
OpenAI expressed its condolences upon hearing the news
“We are devastated to learn of this unfortunate news, and our hearts go out to Suchir's loved ones during this difficult time,” it told CNBC.
Kraken, one of the largest Crypto exchanges in the world, has been fined $5.1 million by the Australian Securities & Investments Commission (ASIC).
The exchange allegedly offered high-risk margin trading products to retail investors.
Moreover, it is accused of implementing proper safeguards to ensure that its margin trading products are marketed appropriately.
Fines for Kraken
According to ASIC, over 1,100 retail customers accessed these products and collectively lost more than $5 million as a result.
One particular case involved an investor who lost nearly $4 million.
Per investigations from ASIC, Kraken continued to offer these risky products to investors despite being aware of their impact.
ASIC alleges that the company failed to develop a Target Market Determination (TMD) for its products, which is a key requirement under Australia’s financial regulations.
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