Background
A federal magistrate judge issued a warrant authorizing the seizure of 119.65 Bitcoin from a specified wallet. The warrant ordered Juan Carlos Reynoso not to obstruct the seizure and required transfer of the assets to a government-controlled wallet within 24 hours after service. Reynoso’s attorney agreed to accept service on his behalf, and prosecutors emailed the warrant to the attorney on January 31, 2025.
The attorney did not open the email until after the 24-hour deadline had passed. Meanwhile, cryptocurrency was transferred from the identified wallet to other wallets, and the government reported that the assets were eventually fully dissipated from the original address. The government sought civil contempt, and the district court held Reynoso in contempt without conducting the evidentiary hearing he requested.
The Court’s Holding
The First Circuit affirmed. It held that the district court did not abuse its discretion by denying an evidentiary hearing because Reynoso failed to identify a genuine dispute of material fact concerning notice, the warrant’s clarity, his ability to comply, or his violation of the warrant.
The undisputed record showed that Reynoso’s attorney agreed to accept service and received the warrant. As to Reynoso’s ability to comply, the government submitted an FBI agent’s declaration tying Reynoso to the cryptocurrency and wallet through seized electronic evidence and the public blockchain. Reynoso neither produced contradictory evidence nor identified evidence he would have presented at a hearing. His conclusory assertions and proposed explanation that the transfers reflected a commercial transaction did not create a material factual dispute.
Key Takeaways
- A court need not conduct an evidentiary hearing before finding civil contempt when the record presents no genuine dispute of material fact.
- Service on counsel who agreed to accept a seizure warrant on the client’s behalf supported the district court’s finding that the client had notice.
- An alleged contemnor asserting inability to comply bears a burden of production and cannot obtain a hearing through conclusory assertions unsupported by identified evidence.
Why It Matters
The decision underscores that a request for an evidentiary hearing in a civil-contempt proceeding must rest on a concrete, material factual dispute. A party opposing contempt should submit available contrary evidence or specifically identify evidence that a hearing would develop.
The ruling also illustrates how blockchain records and evidence recovered from electronic devices may establish ownership or control of cryptocurrency when compliance with a digital-asset seizure warrant is contested.