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  • Writer's pictureConnie Chan

U.S. Feds Seize 50K Bitcoin Related To Silk Road

The U.S. Department of Justice today announced that it had seized $3.36 billion in stolen Bitcoin from James Zhong who he allegedly stole from the illegal Silk Road marketplace.

The U.S. Department of Justice announced on Monday that it had recovered about $3.36 billion in stolen Bitcoin from the residence of James Zhong during a previously unannounced raid in 2021. Authorities seized 50,676 Bitcoin which was valued at $3.36 billion in 2021 from Zhong’s residence in Gainesville, Georgia. The raid was conducted on November 9, 2021, and marks the second-largest financial seizure to date following its seizure of $3.6 billion in allegedly stolen crypto linked to the 2016 hack of crypto exchange Bitfinex according to reports by CNBC. The authorities assert that Zhong stole the Bitcoin from the illegal Silk Road marketplace. Silk Road was a dark web forum on which drugs and other illicit products were traded using cryptocurrencies. Launched in 2011 by Ross William Ulbricht, it was shut down in 2013 following investigations by the Federal Bureau of Investigations. Ulbricht is now serving a life sentence in prison without the possibility of parole.

U.S. Attorney Damian Williams said in a press release:

For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery. Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds.

According to Special Agent in Charge Tyler Hatcher from the Internal Revenue Service – Criminal Investigation, Zhong operated a “sophisticated scheme” in which he stole cryptocurrencies from Silk Road. In 2012, Zhong created nine fraudulent accounts on the marketplace each of which he funded with between 200 and 2,000 Bitcoin. Zhong then proceeded to trigger over 140 transactions in rapid succession which tricked Silk Road’s withdrawal-processing system to release around 50,000 Bitcoin into his accounts.

Prosecutors add that 50,000 Bitcoin were discovered in an underground safe in Zhongs’s bathroom closet. Zhong has subsequently surrendered over 1,000 more Bitcoin and agreed to help prosecutors access the remaining Bitcoin and will provide the technical assistance to do so.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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