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U.S. Authorities Seize $54 Million Worth of Crypto from a Drug Ring Leader

Hongji Feng
Last updated: | 1 min read
Source: Pexels

The U.S. Attorney’s Office is aiming to recover $54 million of crypto in Ethereum from Christopher Castelluzzo, a convicted drug distributor.

On Nov. 2, U.S. Attorney Philip R. Sellinger filed a civil forfeiture action. The goal is to reclaim the seized cryptocurrency. This crypto is linked to Castelluzzo’s illicit narcotics distribution scheme in and around New Jersey. “The civil action we are taking today seeks to recover millions of dollars of cryptocurrency,” Sellinger said.

Castelluzzo Sold Drugs on Darknet for Crypto

From 2010 to 2015, Castelluzzo and accomplices sold narcotics on darknet for crypto. He bought 30,000 ether in Ethereum’s 2014 Initial Coin Offering and acquired 30,000 Ethereum Classic in 2016.

The documents revealed that in 2021, Castelluzzo attempted to move 30,000 ether out of the United States to launder his profits while in prison. However, the local authority intercepted and seized the whole amount.

“Many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement,” FBI Special Agent in Charge James E. Dennehy said.

“Our forfeiture action of $54 million should serve as a lesson to those who mistakenly believe we can’t trace their illicit behavior or their ill-gotten proceeds.”

US Government Has Acquired $5 Billion Worth of Bitcoin From Seizures

Castelluzzo is a former resident of Lake Hopatcong, currently serving concurrent 20-year federal and state prison sentences for drug distribution.

The action against Castelluzzo reflects a growing concern within the law enforcement community for the use of cryptocurrencies in monetizing illegal activities. The anonymity and decentralized nature of cryptos make them an attractive medium for illegal transactions.

The U.S. government has acquired approximately 200,000 Bitcoins (worth around $5 billion) through seizures related to criminal activities, including cybercriminals and darknet markets. The gigantic volume made the U.S. government one of the largest Bitcoin holders in the world.