In a statement on November 2nd, the U.S. Department of Justice announced the seizure of 30,000 Ether (ETH), valued at $54 million, related to illegal drug distribution in New Jersey.
These assets were traced back to Christopher Castelluzo, who had been involved in drug activities from 2010 to 2015. While his illicit activities began in 2010, Castelluzo switched to using Bitcoin (BTC) for drug transactions on the darknet in 2013. He is currently serving a federal and state prison sentence of 20 years for drug distribution.
What’s particularly noteworthy is that Castelluzo initially acquired 30,000 ETH during an ICO in July 2014, using 15 BTC generated from his illegal drug business. At that time, 30,000 ETH was worth just $9,000, but its current value has soared to over $54 million at the time of writing.
In addition to Ethereum, Castelluzo also acquired 30,000 Ethereum Classic (ETC) in 2016 following a hard fork, which he used to purchase other cryptocurrencies.
After being arrested and imprisoned, Castelluzo attempted to launder the 30,000 ETH while in prison. However, the U.S. government thwarted this scheme by intercepting recorded phone calls from the prison in 2021, ultimately leading to the seizure of the assets.
U.S. Attorney Philip R. Sellinger stated, “The civil action we are taking today seeks to recover millions of dollars in cryptocurrency that the defendant is alleged to have obtained from drug sales. Whether it’s as simple as cash in a pocket or as complex as cryptocurrency, we will take the necessary steps to seize the financial proceeds obtained from criminal activity.”
James E. Dennehy, the FBI special agent overseeing the case, emphasized that the seizure action serves as a warning to others involved in criminal activities. He further stated that the government is committed to holding criminals accountable for their actions.