Italian Probe Targets Tax Fraud Using Bitcoin Ordinals and BRC-20

Italian authorities have uncovered a significant tax fraud scheme in which a suspect allegedly used novel Bitcoin-based technologies to conceal approximately 1 million euros, or $1.1 million, in undeclared capital gains. The investigation, led by the Economic and Financial Police Unit in Foggia, represents one of the first major law enforcement cases involving Bitcoin Ordinals and BRC-20 tokens.

According to investigators and a report from blockchain analytics firm Chainalysis, the suspect employed a multi-step process. Using the Ordinals protocol, which allows data to be inscribed onto individual satoshis—the smallest units of Bitcoin—the individual created digital assets. These were then minted and exchanged as BRC-20 tokens, a standard enabling fungible tokens on the Bitcoin network. The assets were listed on specialized marketplaces and sold for a substantial profit, with the proceeds funneled back into a primary Bitcoin wallet. Officials said the cycle repeated, with earnings continuously reinvested into new inscriptions to keep the funds moving and off official tax records. The suspect also allegedly fraudulently applied for and received public subsidies.