The US Department of Justice has seized over $3.36 billion in Silk Road-related BTC that has gone missing since 2012, according to a release from the Department of Justice.
James Zhong, a miner who stole 51,680,32473733 BTC from Silk Road, has pleaded guilty to committing remittance fraud to steal bitcoins from the dark web.
“James Zhong committed wire transfer fraud over a decade ago when he stole approximately 50,000 Bitcoins from Silk Road,” said US Attorney Damian Williams. “For almost ten years, the whereabouts of this large volume of missing Bitcoin has become a mystery of more than $3.3 billion.”
From 2011 to 2013, Silk Road served as a marketplace for users to anonymously purchase drugs, as well as other items not easily obtained through regulated marketplaces. In 2015, Ross Ulbricht, the founder of Silk Road, was arrested and sentenced to life in prison.
“Thanks to modern crypto tracing and good old-fashioned police work, law enforcement has identified and recovered an impressive cache of criminal funds,” continued Williams. “This case shows that we will not stop chasing money, no matter how professionally hidden, even with a circuit board at the bottom of a popcorn box.”
In September 2012, Zhong made a successful transfer fraud attempt by creating at least nine fake accounts, and also launching the Silk Road withdrawal process, which generated over 140 fast consecutive transactions. fast. Bitcoins are dispersed into multiple accounts, which are then moved to multiple bitcoin addresses or wallets.
Initially, Zhong will deposit any amount between 200 and 2,000 BTC to start an account and in moments he will trigger a quick withdrawal of the BTC used to fund the account, but he will make multiple withdrawals and the system cannot keep track of how many withdrawals have been paid out.
On November 9, 2021, IRS-CI agents seized “50,491,06251844 Bitcoins of approximately 53,500 Bitcoin Crime Proceeds (a) in an underground safe; and (b) on a single tablet tucked under a blanket in a popcorn container stored in a bathroom closet. Additionally, law enforcement recovered $661,900 in cash, 25 Casascius coins (physical bitcoins) with an approximate value of 174 Bitcoins, 11.1160005300044 additional Bitcoins, and 4 1-ounce, 3 colored silver bars 1 ounce gold, 4 bars of 10 -silver bars and a gold coin. “
Zhong will be sentenced by Judge Gardephe on February 22, 2023, at 3 pm
