Prisoners’ Dreams to Stash $54M in Crypto in Exotic Locales Dashed as Feds Grab It for Treasury

Federal law enforcement has seized $54 million worth of cryptocurrencies from the leader of a notorious New Jersey drug ring, U.S. Attorney Philip R. Sellinger said Thursday in a statement.

Officials discovered the funds in crypto wallets belonging to Christopher Castelluzzo, a convicted drug trafficker, and his co-conspirators, according to federal officials. The wallets held the laundered proceeds of the crew's mail-order cocaine and designer drug operations, which were active between 2010 and 2015.

“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," FBI Newark Special Agent in Charge James E. Dennehy said in a statement.

What started out as $9,000 in ETH when they first invested the drug proceeds blossomed into about $53 million, authorities said, plus a wide assortment of other tokens Castelluzzo obtained, including solana (SOL), cardano (ADA) and bitcoin. Because it was tied to the original drug trafficking, the U.S. seized it as a forfeiture.

Castelluzzo and others were originally busted in a drug ring that was run through darknet sites including Silk Road and Blue Sky, getting payment at the time in bitcoin. The busy operation was said to distribute a range of drugs including cocaine and methylone from China.

While Castelluzzo was in the midst of serving a 20-year prison sentence, authorities caught him talking about his crypto strategy – including an intention to evade taxes and liquidate his holdings outside the country, the U.S. attorney's office said.

“I sold millions of dollars worth of drugs every single week for almost four years,” Castelluzzo reportedly stated in a letter to the New Jersey Attorney General’s Office earlier this year.

In prison conversations, he and others are recorded debating the merits of various offshore destinations for the crypto fortune, including Malta, Ireland and Latin America.

"Bahamas would be awesome," Castelluzzo is quoted as saying.

Read More: U.S. Authorities Seize $34M in One of the Country's Largest Crypto Confiscations