The US Attorney’s Office has launched a civil forfeiture action to recover $54 million in crypto linked to an illicit narcotics ring operating in New Jersey.
The crypto assets, primarily made up of Ethereum, were traced back to a man named Christopher Castelluzzo. Castelluzzo is a convicted drug dealer currently serving a 20-year prison sentence.
US Government Targets $54M in Ill-Gotten Crypto
“The civil action we are taking today seeks to recover millions of dollars of cryptocurrency, which the defendant allegedly obtained from drug sales.”
Castelluzzo and his accomplices began trading narcotics on darknet sites for Bitcoin around 2013. They then used the proceeds to purchase 30,000 ETH during Ethereum’s initial coin offering (ICO) in 2014. In 2016, they also acquired an additional 30,000 Ethereum Classic (ETC).
While incarcerated, Castelluzzo hatched a scheme to launder his crypto assets and move them outside the US. However, the authorities intercepted his plan through recorded prison calls and seized his cryptocurrency holdings, now valued at approximately $54 million.
James E. Dennehy, FBI – Newark Special Agent in Charge, warned,
“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.”
Feds Hold More Than $5 Billion in Bitcoin
All in all, this case exemplifies the US government’s growing involvement in the crypto space. The federal government currently holds around $5.4 billion in Bitcoin seized from cybercriminals.
Despite this substantial holding, the government has been slow to liquidate. This is primarily due to lengthy legal processes and investigations.
Jarod Koopman, executive director of the IRS’s cyber and forensics services section, explains,
“We don’t play the market. We basically are set by the timing in our process.”
Agencies like the Department of Justice and the IRS control hardware wallets where they keep seized BTC offline. Once cases conclude, the Marshals Service liquidates the Bitcoin and distributes proceeds to victims or covers investigative expenses.
The government’s cautious approach to liquidating seized assets is rooted in prudence. Nicolas Christin, a professor of computer science at Carnegie Mellon University, commented,
“The government moves generally very slowly to dispose of those assets because they’ve got to do a ton of due diligence, the cases are often complicated and there’s a lot of red tape.”
Best crypto exchanges in Europe | November 2023
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.
The post US Government Moves to Seize $54M in Crypto Linked to New Jersey Narcotics Ring appeared first on BeInCrypto.