The First Circuit Court of Appeals upheld a ruling against Juan Carlos Reynoso, affirming that he was in civil contempt for not complying with a seizure warrant. This decision, filed on August 24, 2026, affects Reynoso and the broader legal landscape regarding compliance with court orders, particularly in cases involving cryptocurrency.
Reynoso's case began when a federal prosecutor contacted his attorney, Walter Reynoso, on January 30, 2025, to discuss a pending investigation. The next day, a magistrate judge issued a seizure warrant for 119.65 Bitcoin, which was stored in a specific cryptocurrency wallet. The warrant ordered that Reynoso must not interfere with the seizure and that the assets must be transferred to a government-controlled wallet within 24 hours.
Walter Reynoso agreed to accept the service of the warrant on his client's behalf. However, he did not inform Reynoso about the urgency of the matter, and by the time he opened the email containing the warrant, the deadline had passed, and transfers from the wallet had already occurred. The government filed a motion to hold Reynoso in civil contempt, arguing that he had violated the order by failing to transfer the assets and by dissipating them.
The District Court subsequently issued an order for Reynoso to show cause for why he should not be held in contempt. Reynoso sought an evidentiary hearing to contest the contempt finding, arguing that there were significant issues of material fact in dispute. However, the court denied his request, stating that the facts were not in dispute and that a hearing was unnecessary.
The court ruled that civil contempt requires clear evidence that the alleged contemnor was aware of the order, that the order was clear, that the contemnor had the ability to comply, and that the order was violated. Reynoso's appeal focused solely on whether the District Court abused its discretion by not holding an evidentiary hearing.
The court found that Reynoso's attorney had accepted service of the warrant, thus providing Reynoso with notice. The court also noted that Reynoso failed to present any evidence to dispute the government's claims regarding his ability to comply with the order. The court concluded that the record did not show any genuine issues of material fact, and therefore, an evidentiary hearing would have been unnecessary.
The ruling from the First Circuit Court has significant implications for future cases involving civil contempt. It reinforces the idea that if a party does not present evidence to dispute claims made against them, courts may not find it necessary to hold hearings. This decision may set a precedent for similar cases where compliance with court orders is questioned, especially in the rapidly evolving field of cryptocurrency.
Looking ahead, Reynoso has the option to appeal this ruling to the Supreme Court, although it is unclear if he will pursue that route. There are no known related cases pending that might influence this situation.