The US Attorney Seeks to Recover $54 Million in Crypto Linked to Darknet Narcotics Network
The office of the US Attorney, led by Philip R. Sellinger, is initiating a civil forfeiture action to retrieve $54 million in cryptocurrency. This money is directly connected to an illicit narcotics distribution network operating on the darknet, primarily in New Jersey.
The confiscated amount includes approximately 30,000 Ethereum (ETH) coins, valued at around $54 million. These funds have been traced back to criminal activities and seized by authorities.
The Government’s Authority Over Cryptocurrency
Sellinger made it clear that the government has jurisdiction over not only traditional fiat currency but also any financial gains obtained through criminal activities, including cryptocurrencies. He stated that the civil action aims to recover millions of dollars in cryptocurrency obtained from drug sales.
“Whether it’s as simple as bags of cash or as sophisticated as cryptocurrency, we will take the steps necessary to seize financial gains defendants obtain from criminal activity,” said Sellinger.
Operation Details and Seizure Process
The target of this forfeiture is Christopher Castelluzzo and his associates, who were involved in a sophisticated drug distribution scheme from 2010 to 2015. They began accepting Bitcoin on the darknet in 2013 for their illegal products.
Castelluzzo used the Bitcoin profits to acquire 30,000 units of Ethereum during its initial fundraising event in 2014. He also obtained an equivalent amount of Ethereum Classic two years later. These digital holdings are now subject to seizure under US law enforcement actions.
Castelluzzo, who is currently serving a 20-year sentence for distributing narcotics, was caught trying to transfer the cache of 30,000 ETH internationally to evade taxes. Authorities discovered his scheme through monitored telephone discussions from prison in 2021.
Crackdown on Recent Crypto Crimes
The case of Castelluzzo is one of several digital currency crimes exposed in recent months. Taiwanese authorities dismantled a significant crypto-related money laundering operation, leading to the arrest of multiple individuals involved in handling around 324.2 million USDT (Tether).
In response to the rising trend of crypto-related offenses, the US Department of Justice has restructured its National Cryptocurrency Enforcement Team (NCET) to investigate and combat crimes associated with digital currencies.
Collaborative Effort and Conclusion
US Attorney Philip R. Sellinger’s forfeiture action is not an isolated effort but the result of collaboration among multiple agencies. The FBI’s Virtual Assets Unit, Homeland Security Investigations, and various local law enforcement entities have played crucial roles in tracking and securing these assets.
This crackdown on crypto-related crimes highlights the government’s determination to address illicit activities within the cryptocurrency space.
Hot Take: US Attorney Seizes $54 Million in Crypto Linked to Darknet Drug Network
The US Attorney’s office, led by Philip R. Sellinger, is taking decisive action against criminal activities involving cryptocurrencies. In this case, $54 million in crypto, including 30,000 Ethereum coins, has been seized from a darknet narcotics network operating primarily in New Jersey. Sellinger emphasizes that financial gains derived from criminal acts will be subject to seizure, regardless of whether they involve traditional fiat currency or cryptocurrencies. This latest crackdown on crypto crime is part of a broader effort by law enforcement agencies to combat illegal activities facilitated by digital currencies. It demonstrates the government’s commitment to holding criminals accountable and safeguarding the integrity of the cryptocurrency ecosystem.
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