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.
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.
“Many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement,” FBI – Newark 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. We will successfully hold all criminals responsible in the open, with real world consequences.”
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
