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Chainalysis Says Tax Evaders Used Bitcoin Ordinals and BRC-20 Tokens to Hide Gains

Chainalysis Says Tax Evaders Used Bitcoin Ordinals and BRC-20 Tokens to Hide Gains

According to Italy’s Guardia di Finanza and Chainalysis, investigators traced a years-long Bitcoin Ordinals and BRC-20 tax evasion scheme worth more than €1 million despite the use of privacy-oriented wallet practices.

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Fact Check
The claim is directly and fully corroborated by Chainalysis's own official blog post ('How Blockchain Intelligence Uncovered a Million-Euro Bitcoin Ordinals Tax Fraud Scheme', May 20, 2026), which is the originating primary source. All key claim elements are confirmed: (1) Chainalysis's involvement, (2) Italy's Guardia di Finanza as the law enforcement partner, (3) Bitcoin Ordinals and BRC-20 tokens as the instruments used, (4) the scheme exceeding €1 million in value, and (5) the use of privacy-oriented wallet practices (address rotation) that were nonetheless defeated by on-chain tracing. Two independent news outlets (Cryptopolitan and crypto.news) published corroborating reports on May 21, 2026, adding operational detail consistent with the Chainalysis blog. No conflicting or contradictory evidence was found across any source.
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Summary

Chainalysis said Italian financial police uncovered a years-long tax fraud scheme involving Bitcoin Ordinals and BRC-20 tokens that generated more than €1 million, or about $1.1 million, in undeclared profits and also included fraudulent applications for public support. The investigation was led by the Unit of Economic and Financial Police of Foggia with support from the Special Unit for Privacy Protection and Technological Fraud in Rome, and began after authorities seized a Ledger hardware wallet during a house search. Investigators found that although the wallet generated new addresses for each transaction, ownership analysis linked the addresses to a single owner. According to the report, the scheme used a four-step process in which satoshis were moved from a main wallet cluster to an inscription service, data was written into Bitcoin transaction witness fields to create Ordinals, BRC-20 tokens were minted and exchanged, and proceeds were cycled back into the main wallet pool to fund additional inscriptions. Chainalysis Reactor was used to map the transaction flow into what investigators described as an inscription monetization cycle, reinforcing the conclusion that Bitcoin’s UTXO-based structure still allows full on-chain traceability even for newer asset types such as Ordinals and BRC-20 tokens.

Terms & Concepts
  • Bitcoin Ordinals: A method for inscribing data onto individual satoshis on the Bitcoin blockchain, enabling NFT-like assets and other inscription-based activity on Bitcoin.
  • BRC-20: A fungible token standard on Bitcoin that uses Ordinals inscriptions rather than smart contracts to create and transfer tokens.
  • UTXO: Unspent transaction output, the accounting model used by Bitcoin that tracks spendable outputs and can help investigators trace transaction flows on-chain.