The U.S. Attorney’s Office is taking legal action to retrieve $54 million worth of cryptocurrency in Ethereum from Christopher Castelluzzo, a convicted drug distributor. On November 2, U.S. Attorney Philip R. Sellinger filed a civil forfeiture action with the goal of reclaiming the seized cryptocurrency, which is connected to Castelluzzo’s illicit narcotics distribution scheme in and around New Jersey. Sellinger stated, “The civil action we are taking today seeks to recover millions of dollars of cryptocurrency.”
Criminal Activity and Attempts to Launder Profits
From 2010 to 2015, Castelluzzo, along with his accomplices, conducted the sale of narcotics on the darknet in exchange for cryptocurrency. In Ethereum’s 2014 Initial Coin Offering, Castelluzzo bought 30,000 ether, and in 2016, he acquired 30,000 Ethereum Classic. Recently, in 2021, it came to light that Castelluzzo tried to move his 30,000 ether out of the United States while in prison to launder his profits. However, the local authorities intervened and seized the entire amount. Reflecting on this, FBI Special Agent in Charge James E. Dennehy remarked, “Many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement.”
A Growing Concern for Law Enforcement
Castelluzzo, currently serving concurrent 20-year federal and state prison sentences for drug distribution, was a former resident of Lake Hopatcong. The legal action taken against him highlights the increasing worry within the law enforcement community regarding the use of cryptocurrencies in illicit activities. The anonymous and decentralized nature of cryptocurrencies make them an appealing medium for illegal transactions. The U.S. government has confiscated approximately 200,000 Bitcoins, valued at around $5 billion, in connection with criminal activities involving cybercriminals and darknet markets. This significant volume has made the U.S. government one of the world’s largest holders of Bitcoin.
