Oxycodone Dealer’s Crypto Fortune Targeted in Legal Battle
Dark Web Dealings
Zhengcheng Huang, operating under the alias “Chinodrug,” was at the center of a significant illegal drug operation on the dark web, according to federal prosecutors. His scheme involved shipping oxycodone across the United States, predominantly accepting payment in Bitcoin, making transactions challenging to trace.
Huang’s situation escalated when he entered a guilty plea to charges of conspiracy to distribute oxycodone earlier this year. This led federal prosecutors in Philadelphia to initiate proceedings to seize the profits he allegedly earned from his illegal activities, sparking a contentious legal dispute.
Peculiar Legal Challenges
Typically, individuals convicted of similar crimes are subject to fines ranging from $500,000 to $1 million. Huang’s legal team calculated that had he sold his drugs for cash rather than cryptocurrency, he would have beheld around $1.7 million in revenue. However, due to the surge in Bitcoin’s value, the nearly 200 Bitcoins in his possession are currently valued at approximately $25 million.
This notable increase in Bitcoin’s worth since his operation commenced has brought Huang’s financial standing under scrutiny and placed his crypto assets under threat of forfeiture.
Attempts to Retain Wealth
In an effort to protect his assets, Huang’s lawyers took multiple legal steps. They contended that some of the Bitcoins were acquired with legitimate funds, and argued that the government’s move to seize such a substantial amount greatly exceeded what would be reasonable for the drug sales he conducted. They asserted that this seizure could be viewed as a violation of the Eighth Amendment, which protects against excessive fines.
However, U.S. District Judge Michael Baylson ruled against Huang’s claims, allowing the seizure process to proceed.
The Court’s Decision
Judge Baylson expressed that this case stands as one of the most severe drug-related matters he had witnessed, taking into account the volume of drugs involved. Huang issued an apology during the court proceedings, acknowledging the harm caused by exploiting others’ addictions for financial gain.
Despite Huang’s expression of remorse, Baylson imposed a sentence of 15 years in federal prison and approved the confiscation of the Bitcoin wealth, underscoring the grave nature of Huang’s crimes.
The Unraveling of Huang’s Operation
Investigators began tracing Huang’s operation back in 2022 when they identified a Bucks County resident sending large sums of virtual currency to the Chinodrug marketplace on the dark web. Huang’s listings on the vendor page offered various quantities of oxycodone and Percocet, promising discreet delivery through the U.S. Postal Service with “stealth packaging.”
Huang and his network distributed drugs to several states, including Pennsylvania, California, Michigan, New Hampshire, and Florida.
Investigative Findings
Following a conversation with a buyer, investigators linked a Stamps.com account to the Chinodrug operation that was responsible for roughly 15,000 shipments. Eventually, they obtained information about a Bitcoin wallet used for transactions, enabling them to connect the digital currency back to Huang, who was said to have amassed about 200 Bitcoins.
Prosecutors allege that all these assets stemmed from his involvement with Chinodrug, which they assert spanned six years, starting in 2018 and concluding with Huang’s arrest in 2024.
Disputes Over Asset Value
Huang’s defense counters that he only became involved with Chinodrug in 2021 when he purchased the marketplace and oversaw its operations. They maintained that he was accountable for approximately $1.7 million in drug revenues—equivalent to about 25 Bitcoins at current values. His legal team argued that seizing his entire collection of Bitcoins would be excessively punitive, significantly exceeding any potential fines imposed.
Judge Baylson, however, expressed skepticism towards the notion of Bitcoin’s value, characterizing it as speculative and noting it has not been recognized by Congress as a stable currency. He argued that while the seizure may seem steep, it matched the gravity of Huang’s offenses.
Moving Forward
Huang’s legal representative hinted at the possibility of appealing the forfeiture ruling. Meanwhile, prosecutors remain poised to liquidate Huang’s cryptocurrency holdings if the forfeiture stands.
As the discussion over Bitcoin’s legitimacy and valuation continues, Judge Baylson emphasized the speculative nature of cryptocurrency, labeling much of the ongoing debate as “purely hypothetical” and without grounding in credible valuation.
