The US Department of Justice announced that the law enforcement seized more than 50,000 bitcoins from a hacker from Georgia, who stole from darkweb market Silk Road over a decade ago.
James Zhong who pled guilty to committing wire fraud in September 2012, exploited a flaw in the Silk Road that allowed him to withdraw more Bitcoin than he deposited on the dark web marketplace. He funded nine fraudulent accounts with an initial deposit of 200 to 2,000 bitcoin and then triggered 140 withdrawal transactions in rapid succession.
The authorities seized the stolen funds on November 2021, which was the biggest-ever seizure of cryptocurrency at that time and today remains the department’s second-largest financial seizure. The US authorities are seeking to forfeit, collectively, approximately 51,680.32473733 Bitcoin.
Law enforcement located 50,491.06251844 Bitcoin of the approximately 53,500 Bitcoin Crime Proceeds. The funds were stored in an underground floor safe and on a single-board computer hidden in the Zhong’s house.
The police also recovered $661,900 in cash (25 Casascius coins (physical bitcoin)) along with 11.1160005300044 additional Bitcoin, and four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin.
In August 2017, Bitcoin split into two cryptocurrencies, traditional Bitcoin and Bitcoin Cash (“BCH”).
At the time, Zhong received 50,000 Bitcoin cash and the Bitcoin Cash was converted into 3,500 Bitcoins, which totaled 53,500 Bitcoin.
In March 2022, Zhong opted to surrender an additional 825.4 Bitcoins to the authorities, and in May 2022, he provided another 35.5 Bitcoin.
ZHONG is scheduled to be sentenced on February 22, 2023, at 3:00 p.m. The charge carries a maximum sentence of 20 years in prison.
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