US Seizes $54M Cryptocurrency Linked to Drug Scheme

The U.S. Attorney’s Office files civil forfeiture action to recover $54 million in cryptocurrency from an illegal darknet drug scheme in New Jersey.

United States Seized and Files Forfeiture Action to Recover over $54 Million of Cryptocurrency Traceable to Narcotics Distribution Scheme

— US Attorney Sellinger (@USAttySellinger) November 2, 2023

U.S. Attorney Philip R. Sellinger said, “The civil action we are taking today seeks to recover millions of dollars of cryptocurrency, which the defendant allegedly obtained from drug sales.” 

The seized assets include 30,000 ether, now valued at about $53.5 million, purchased during Ethereum’s July 2014 initial coin offering. The cryptocurrency was connected to convicted drug trafficker Christopher Castelluzzo.

Castelluzzo, serving a 20-year sentence, allegedly converted bitcoin earnings from drug sales into 30,000 ether during the 2014 ICO. He also received 30,000 ether classic ($505,000) in 2016 as part of his strategy to diversify illegal profits into different cryptocurrencies.

Despite trying to evade taxes and move assets overseas while in prison, authorities acted on recorded prison calls, preventing the laundering of Castelluzzo’s cryptocurrency holdings. The effort involved the FBI’s Virtual Assets Unit, Homeland Security Investigations, and local law enforcement.

The case sends a strong message to criminals who use cryptocurrency on the darknet, emphasizing that illicit gains can be traced and seized, whether in cryptocurrency or cash.

Also  Read: FBI’s 3-Month Operation Seizes $1.7M in Cryptocurrencies

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2023-11-03 20:54