Italian investigators from the Guardia di Finanza uncovered a sophisticated tax evasion scheme involving Bitcoin Ordinals and BRC-20 tokens, where a suspect accrued over €1 million in undeclared capital gains while fraudulently receiving public subsidies. Using Chainalysis Reactor, law enforcement traced funds from a seized Ledger hardware wallet, mapping complex transaction cycles. Despite the suspect's use of multiple addresses generated by the wallet's privacy features, common-input-ownership heuristics linked them to a single entity. The scheme involved funding inscriptions, listing them on marketplaces, and reinvesting profits. Exchange cooperation via KYC data ultimately identified the suspect. This case demonstrates that no novel crypto asset class can evade blockchain transparency and forensic analysis.

Key facts

• Suspect used Bitcoin Ordinals and BRC-20 tokens to hide over €1 million in capital gains.
• Chainalysis Reactor linked fragmented addresses from a seized Ledger wallet to a single entity.
• Funds flowed through inscription services, marketplaces, and back to the suspect's wallet.
• Exchange KYC data bridged pseudonymous on-chain activity to real-world identity.
• Case highlights blockchain transparency as a tool against tax evasion in novel asset classes.

KeyAudit data perspective