A Puerto Rico court has fined Juan Carlos Reynoso $10,000 daily for refusing to surrender 119 Bitcoin ($9.7M) linked to criminal activities. The judge ruled him in contempt of court, escalating penalties until compliance.
Puerto Rico Federal Judge Holds Defendant in Contempt Over Seized Crypto Assets
A federal court in Puerto Rico has imposed a $10,000 daily fine on Juan Carlos Reynoso for failing to surrender 119.65 BTC (approximately $9.7 million) to U.S. authorities. Senior U.S. District Judge Francisco A. Besosa ruled Reynoso in contempt of court, enforcing the penalty until he transfers the funds to a government-controlled wallet.
Bitcoin Moved After Seizure Order
The U.S. government obtained a seizure warrant on Jan. 31, 2025, targeting Reynoso’s bitcoin, which authorities claim is linked to criminal activities. However, within 24 hours of the order, Reynoso allegedly moved the BTC across multiple wallets, according to blockchain tracking records cited in court.
The FBI traced the wallet to Reynoso after seizing his laptop in June 2024, discovering software tied to a Ledger hardware wallet. Prosecutors argued that Reynoso’s swift asset transfers confirmed his control over the funds, but he refused to comply with the court’s directive.
Legal Battle and Constitutional Argument Rejected
Reynoso attempted to block the warrant, citing Fifth Amendment protections. However, Judge Besosa dismissed the argument, referencing a 2016 ruling (United States v. Apple Mac Pro Comp.), which upheld a similar contempt order against a defendant who refused to decrypt electronic devices.
His attorney, Walter Reynoso, received the seizure warrant on Jan. 31 but failed to review it before the compliance deadline, which the court deemed “willful ignorance.” Reynoso’s motion to quash the order was also rejected.
Court Escalates Penalties for Noncompliance
The judge ruled that the $10,000 daily fine would continue until Reynoso returns the bitcoin. If he refuses, additional sanctions or imprisonment could follow. As of March 4, the court confirmed that Reynoso had not transferred the BTC.
Reynoso, a Peruvian national, has a history of financial crimes and remains under investigation in multiple jurisdictions. The case underscores law enforcement challenges in recovering digital assets, even with blockchain transparency.
Judge Besosa emphasized that the court’s actions are coercive, not punitive:
The coercive fines and arrest warrant will be lifted as soon as the court is satisfied that the bitcoin is transferred.
Government Faces Challenges in Bitcoin Seizures
Due to Bitcoin’s decentralized and censorship-resistant nature, authorities cannot seize the assets without Reynoso’s cooperation. If he continues to resist compliance, the government may struggle to recover the funds indefinitely.
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