US Takes $54 million in cryptocurrency connected to a drug scam

11/04/2023Cryptocurrency, USA

In order to reclaim $54 million in bitcoin from an illicit darknet narcotics network in New Jersey, the U.S. Attorney’s Office initiates a civil forfeiture lawsuit.

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

30,000 ether, which is currently worth roughly $53.5 million, was acquired at Ethereum’s initial coin offering in July 2014 and is among the seized assets. Christopher Castelluzzo, a convicted drug dealer, was linked to the cryptocurrency.

During the 2014 ICO, Castelluzzo—who is currently serving a 20-year sentence—is accused of converting bitcoin profits from drug sales into 30,000 ether. In 2016, he was also given 30,000 ether classic ($505,000) as part of his plan to spread his illicit gains among several cryptocurrencies.

Authorities responded to taped phone calls from the prison, stopping Castelluzzo’s attempts to launder his bitcoin holdings, even though he was trying to avoid paying taxes and transfer assets abroad. Local law enforcement, Homeland Security Investigations, and the FBI’s Virtual Assets Unit collaborated on the project.

According to FBI – Newark Special Agent in Charge James E. Dennehy, “many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement.” “Those who hold the false belief that we are unable to track down their unlawful activities or their illicitly obtained wealth ought to learn from our $54 million forfeiture action. All criminals will be successfully held accountable in public, with repercussions in the real world.