- Federal authorities seize $54 million in cryptocurrencies connected to drug kingpin Christopher Castelluzzo.
- The seized assets include 30,000 Ethereum tokens obtained through illegal activities.
- Castelluzzo attempted to launder the cryptocurrency from prison before law enforcement got him.
U.S. Attorney Philip Sellinger has announced that federal law enforcement authorities have seized $54 million worth of cryptocurrencies linked to Christopher Castelluzzo, the leader of a notorious drug ring based in New Jersey. The seizure marks a significant blow to Castelluzzo and his co-conspirators, whose illicit activities spanned from 2010 to 2015.
According to federal officials, at least 30,000 Ethereum tokens were discovered in crypto wallets owned by Castelluzzo and his associates. These wallets held the laundered proceeds from their illegal operations, which involved the distribution of mail-order cocaine and designer drugs.
Per the complaint, what initially started as an investment of $9,000 in Ethereum (ETH) from their drug proceeds had grown to $54 million. The complaint highlighted that Castelluzzo presently serves concurrent 20-year sentences in both federal and state prisons due to drug distribution convictions. However, during his incarceration, the value of Ethereum surged.
Therefore, Castelluzzo hatched a plan while in prison to evade taxes and transfer his 30,000 Ethereum holdings out of the United States. However, before he could execute this plan, the United States authorities uncovered his attempt to launder cryptocurrency through recorded prison telephone calls in 2021.
As a result, the authorities intervened and seized Castelluzzo’s cryptocurrency holdings. The report stated that the U.S. government seized these cryptocurrencies due to their connection to the original drug trafficking activities.
FBI Newark Special Agent James Dennehy argued that the successful forfeiture underscores the government’s ability to trace and confiscate the ill-gotten gains of individuals engaged in illegal activities.
Notably, Castelluzzo and his associates were apprehended initially as part of a drug ring that operated through darknet platforms like Silk Road and Blue Sky, where they accepted payments in Bitcoin. The operation was known for distributing a wide range of narcotics, including cocaine and methylone, sourced from China.
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