The U.S. Department of Justice(DOJ) announced on Monday that law enforcement seized $3.36 billion in bitcoin from a man who “illegally obtained” more than 50,676 bitcoin from the dark-web market, Silk Road, over a decade ago.
According to the U.S. Attorney for the Southern District of New York, the man identified as James Zhong of Gainesville, Georgia, pleaded guilty on November 4, 2022, to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 Bitcoin from the Silk Road dark-web internet marketplace. The maximum sentence for the crime is 20 years in prison.
The plea came almost a year after law enforcement seized 50,676.17851897 bitcoin, then valued at more than $3.36 billion, from Zhong’s home.
This seizure was then the largest cryptocurrency seizure in the history of the U.S. Department of Justice and today remains the Department’s second largest financial seizure ever.
The statement said, officials found the bitcoin in an underground floor safe and on a single-board computer that was hidden under blankets in a popcorn tin placed in a bathroom closet.
Law enforcement also recovered $661,900 in cash, 25 Casascius coins of bitcoin (valued at about 174 bitcoin), an additional 11.116 bitcoin and a handful of silver and gold colored bars.
New York Attorney Damian Williams stated,
“James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. 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,” Damian added, “law enforcement located and recovered this impressive cache of crime proceeds.”
“Mr. Zhong executed a sophisticated scheme designed to steal Bitcoin from the notorious Silk Road Marketplace. Once he was successful in his heist, he attempted to hide his spoils through a series of complex transactions which he hoped would be enhanced as he hid behind the mystery of the ‘darknet.’”
The Silk Road was a notorious area of the dark web and was known for running for about two years. The Department of Justice claims that between 2011 and 2013, the contentious network was used to launder money and offer illegal services.
Ulbricht was subsequently given a life sentence after being found guilty on all counts by a jury and the U.S. government shut down Silk Road. Williams stated as his final words,
“This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin”
