Arizona Bitcoin Trader Convicted for Crypto Money Laundering

An Arizonan bitcoin trader has been convicted for using the cryptocurrency to launder the proceeds of drug deals. 

AccessTimeIconMar 30, 2018 at 1:00 p.m. UTC
Updated Sep 13, 2021 at 7:45 a.m. UTC

An Arizona bitcoin trader been convicted for using the cryptocurrency to launder the proceeds of drug deals.

Thomas Mario Costanzo, who goes by Morpheus Titania on Twitter and operated a peer-to-peer bitcoin exchange website, was found guilty of charges of five money laundering by a federal jury in Phoenix on March 28, according to a Justice Department announcement.

The case stems from a previously reported raid in April 2017 by the U.S. Department of Homeland Security, in which Costanzo was initially arrested for unlawful possession of ammunition that derived from a prior conviction. The DHS further seized Costanzo's cryptocurrency assets including bitcoin, ethereum and dash, and software pertaining to the tech.

While Costanzo was held in custody following the raid, searches conducted by federal agents at the time raised suspicions that he was using cryptocurrencies to launder proceeds for drug dealers.

The latest conviction came via evidence presented to the federal jury that Costanzo had laundered $164,700 during a two-year period – money taken from undercover federal agents who approached the trader saying they were heroin and cocaine traffickers, according to the announcement.

In addition, evidence was also presented to show that the felon himself used bitcoin to buy drugs, as well as offering an online bitcoin exchange service for others purchasing drugs without implementing know-your-customer authentication procedures.

The Justice Department said each of the five charges can bring a maximum sentence of 20 years in prison, a $250,000 fine, or a combination of the two. Costanzo is expected to face sentence on June 11.

Cryptocurrencies involved in the case may be forfeited by the U.S. government, added the Justice Department.

Court gavel image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.