U.S. Seeks Forfeiture of $18M in Bitcoin from Alleged Drug Trafficker
On Monday, April 28, 2025, the United States government filed a motion in the US District Court for the Eastern District of Pennsylvania requesting a forfeiture hearing for approximately 199 Bitcoin seized from Zhengcheng Huang, a defendant in a drug trafficking case. The motion seeks to determine if the cryptocurrency is subject to forfeiture ahead of Huang’s sentencing on June 20, 2025.
Huang, a lawful permanent resident of the US and a citizen of China, was indicted on April 10, 2024, for conspiracy to distribute oxycodone, a Schedule II controlled substance, in violation of federal law. On February 28, 2025, he pleaded guilty to the charge without a plea agreement and is now contesting the forfeiture of the seized Bitcoin, valued at over $18 million. The government alleges the cryptocurrency represents proceeds from Huang’s illegal activities or was used to facilitate his drug trafficking operation.
According to court documents, Huang led a conspiracy under the alias CHINODRUG, operating on darknet marketplaces, including ASAPMARKET, to sell oxycodone and other controlled substances to buyers across the United States. The operation, active from 2018 to 2024, allegedly shipped over 15,000 parcels containing opioids, generating millions in illicit revenue, primarily in Bitcoin. The drugs were mailed via the US Postal Service, often using fake return addresses linked to massage or spa businesses in Washington state.
On April 17, 2024, authorities arrested Huang at his residence and seized a Trezor cryptocurrency wallet containing approximately 199 Bitcoin. The government claims these funds are traceable to CHINODRUG’s drug sales or were used to support the conspiracy through expenses like bribes and shipping costs. Blockchain analysis revealed that CHINODRUG controlled multiple Bitcoin wallets, receiving over 294 Bitcoin from darknet markets and exchanges like HUOBI and OKEX. The seized Bitcoin, the government argues, is directly linked to these transactions.
The investigation uncovered significant evidence of Huang’s activities. In February 2023, authorities seized 83,613 oxycodone pills from a storage unit in Kent, Washington, rented by Huang under an alias. Following the seizure, Huang fled to Asia but continued to manage CHINODRUG’s operations, including purchasing US postage through a Chinese bank account under a false identity. Interviews with buyers in Pennsylvania confirmed they purchased oxycodone from CHINODRUG, paying in Bitcoin for shipments delivered to their residences. One seizure in March 2023 contained authentic OxyContin pills manufactured in Europe and shipped to China.
The government’s motion outlines the legal basis for forfeiture, stating that the Bitcoin is subject to seizure if it is proven to be proceeds of Huang’s crimes or was used to facilitate them. The forfeiture process involves two stages: a preliminary determination of the assets’ connection to the crime, followed by an ancillary proceeding where third parties can claim an interest in the forfeited property. Huang’s attorney has suggested that some of the Bitcoin may have come from legitimate sources, such as relatives in China, but the government disputes this, citing records showing minimal use of Chinese currency to purchase cryptocurrency.
The motion emphasizes that Huang has no known legal income sources, and the evidence, including blockchain analysis and financial records, supports the conclusion that the Bitcoin is tied to CHINODRUG’s operations.
Special Agent Gordon is expected to testify at the June 18 hearing to detail the investigation’s findings. The government seeks a preliminary order of forfeiture, which would be final as to Huang at sentencing, though third parties could later file claims in an ancillary proceeding.
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