U.S. Attorney Aims to Recover $54 Million in Ethereum from Convicted Drug Dealer
The U.S. Attorney’s Office is making a move to reclaim $54 million worth of Ethereum in a civil forfeiture action against Christopher Castelluzzo, a convicted drug distributor.
On November 2, Philip R. Sellinger, the U.S. Attorney, filed the action to recover the seized cryptocurrency, which is linked to Castelluzzo’s illegal narcotics distribution operation in New Jersey. Sellinger commented, “The civil action we are taking today seeks to recover millions of dollars of cryptocurrency.”
Darknet Drug Sales Funded Ethereum Holdings
Castelluzzo and his associates operated a narcotics business on the darknet, conducting transactions using cryptocurrencies between 2010 and 2015. During the 2014 Ethereum Initial Coin Offering (ICO), he acquired 30,000 ether, and in 2016, he added 30,000 Ethereum Classic to his holdings.
In 2021, while in prison, Castelluzzo attempted to move 30,000 ether out of the United States to launder his drug proceeds, but local authorities intercepted and seized the entire sum.
FBI Special Agent in Charge James E. Dennehy highlighted the use of cryptocurrency by criminals on the darknet and underlined the government’s ability to trace illicit activities and seize ill-gotten assets.
Growing Concerns over Cryptocurrency Use in Illicit Activities
Christopher Castelluzzo is currently serving concurrent 20-year federal and state prison sentences for drug distribution. The action taken against him reflects the increasing concern within law enforcement regarding the use of cryptocurrencies to facilitate illegal activities. The perceived anonymity and decentralized nature of cryptocurrencies make them appealing for conducting illicit transactions.
The U.S. government has acquired approximately 200,000 Bitcoins, worth around $5 billion, through seizures related to criminal activities, including cases involving cybercriminals and darknet markets. This vast amount has made the U.S. government one of the world’s largest Bitcoin holders.