A court in Puerto Rico fines a man $10,000 daily for refusing to hand over 119 Bitcoin

A Puerto Rican federal court has held Juan Carlos Reynoso in contempt for his refusal to deliver 119.65 BTC valued at approximately $9.7 million, imposing a daily fine of $10,000 until he complies with the order of seizure.

The accused faces increasing penalties after transferring the seized bitcoins to other wallets

On March 4, 2025, Judge Francisco A. Besosa ruled that Reynoso must transfer the bitcoins to a wallet controlled by the government or face increasing penalties. U.S. authorities had obtained a seizure order on January 31, alleging that these assets were linked to criminal activities.

Instead of complying with the order, Reynoso transferred the bitcoins to multiple wallets in less than 24 hours, according to blockchain records cited in court documents. The FBI tracked the funds after confiscating his laptop in June 2024, which contained software for a Ledger hardware wallet. Prosecutors argue that these rapid transfers demonstrate that Reynoso can access the funds but is deliberately defying the court.

The judge rejected Reynoso's argument about the violation of his constitutional rights, citing a precedent from 2016 where a defendant spent four years in prison for refusing to decrypt devices. According to Besosa, transferring the bitcoins does not imply self-incrimination, as ownership had already been established judicially.

Walter Reynoso, the accused's lawyer, received the notification but did not review it until after the deadline, subsequently claiming deceit on the part of the prosecutors. The court dismissed this argument, labeling it as “deliberate ignorance” and denied the motion to annul the order.

What irony! The judicial system tries to impose its authority over a technology designed precisely to evade centralized control. I wonder if they really understand what they are up against. The authorities can issue all the orders they want, but without the private keys, those bitcoins will remain inaccessible indefinitely.

Reynoso, a Peruvian citizen with a history of legal issues related to drug trafficking and financial crimes, seems willing to pay $10,000 daily rather than surrender his millions in bitcoin. A risky bet, but understandable if we consider that he could face decades in prison if those funds reveal connections to additional illicit activities.

This case highlights the fundamental tension between state sovereignty and the financial autonomy that Bitcoin provides. Despite the transparency of the blockchain, without voluntary cooperation, authorities find themselves in a technological dead end that no fine or threat seems able to resolve.