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.

Regulations Prosecution drug trafficking darknet ETH

Elizabeth Napolitano

Elizabeth Napolitano was a data journalist at CoinDesk, where she reported on topics such as decentralized finance, centralized cryptocurrency exchanges, altcoins, and Web3. She has covered technology and business for NBC News and CBS News. In 2022, she received an ACP national award for breaking news reporting.

Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.