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Arizona Localbitcoins Trader Detained by U.S. Homeland Security




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A well-known bitcoin blogger and Localbitcoins trader was taken into custody by Federal law enforcement agencies in Arizona last week. Thomas Costanzo, otherwise known as “Morpheus” is allegedly being investigated for digital currency money laundering charges.

Also Read: Bitcoin’s Triumphant Q1 Price Resilience and Performance Surpassed All Fiat Currencies


Arizona Bitcoin Trader Arrested by Federal Agents  

According to local reports and warrants obtained by the libertarian news outlet Freedom’s Phoenix Costanzo was detained by the U.S. Department of Homeland Security when officers raided his home on April 20. Costanzo is a well-known figure within Bitcoin and agorism-focused circles for his “Bitcoin and Cash” blog and libertarian writings.

A report published by the Phoenix New Times details that law enforcement agents are investigating Costanzo’s monetary dealings with bitcoin and other altcoins. Costanzo sold mining equipment, bitcoin ATMs, and sold cryptocurrency for an occupation over the past few years.

According to the regional publication, Costanzo is a popular Arizona trader who used Localbitcoins, and agents were authorized to confiscate financial records and any illegal contraband in his home.

Arizona Localbitcoins Trader Detained by U.S. Homeland Security
Thomas Costanzo’s blog “Bitcoins and Cash.”

Unlicensed Money Transmission

Law enforcement officials obtained a warrant from U.S. Magistrate Judge David Duncan to search Costanzo’s residence in Maricopa County. According to reports, Costanzo has only been charged with possession of 60 cartridges of ammunition, but warrants and investigators suggest federal authorities are also looking into his “unlicensed money transmitting business.” Costanzo appeared at his detention hearing on April 27 and was subsequently denied bail.

Arizona Localbitcoins Trader Detained by U.S. Homeland Security
Costanzo’s property receipt seized by Federal agents contains the words “bitcoins.” Photo via Freedom’s Phoenix

According to sources, the court believes Costanzo is a “flight risk” and will be held in custody until his trial begins. Federal prosecutors told U.S. Magistrate Judge Michelle Burns that Costanzo has a history of skipping out on warrants and other criminal court cases.

Why Is a Federal Taskforce Raiding a Man’s Home Over a Small Box of Ammunition?

The case has also been controversial across social media platforms as some critics have said the case has nothing to do with cryptocurrency. So far Costanzo is only charged with the ammunition possession. However other sources such as the Phoenix New Times suggest the investigation is likely a direct result of a cryptocurrency anti-money laundering crackdown by U.S. federal agencies.

People with these opinions believe it’s a bit extreme for Homeland Security to be arresting Costanzo for a mere sixty cartridges of Winchester ammunition.


How do you feel about a Localbitcoins trader being detained by the police? Let us know in the comments below.


Images via Shutterstock, Freedom’s Phoenix, and the Phoenix New Times.  


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