The U.S. Division of Justice (DoJ) on Monday stated it seized 50,676 Bitcoin in November 2021 that was stolen within the 2012 hack of the now-defunct Silk Highway darkish internet market.
The bitcoin, which was obtained in 2012 and valued at $3.36 billion when it was found final yr, is now price $1.04 billion. Moreover recovered had been $661,900 in money, 25 Casascius cash with an approximate worth of 174 Bitcoin, and gold- and silver-colored bars.
It is also one of many largest cryptocurrency seizures so far, adopted by the confiscation of $3.6 billion price of bitcoin earlier this February tied to the 2016 breach of the Bitfinex crypto trade.
The Justice Division stated it carried out the seizure on November 9, 2021, pursuant to a search warrant issued to James Zhong’s home situated within the U.S. state of Georgia. It additionally stated the keys to the tokens had been present in an underground flooring protected and on a “single-board pc that was submerged beneath blankets in a popcorn tin saved in a rest room closet.”
The 32-year-old, on November 4, additionally pleaded responsible to 1 rely of committing wire fraud in September 2012 when he unlawfully siphoned the cryptocurrency from Silk Highway. The cost carries a most sentence of 20 years in jail.
“Mr. Zhong executed a complicated scheme designed to steal bitcoin from the infamous Silk Highway market,” Tyler Hatcher, IRS-CI particular agent in cost, stated. “As soon as he was profitable in his heist, he tried to cover his spoils by means of a sequence of advanced transactions which he hoped could be enhanced as he hid behind the thriller of the ‘darknet.'”
Previous to its takedown in 2013, Silk Highway flourished as a black market on the darknet for unlawful medication and different illicit items and companies, enabling prison actors to launder funds passing by means of it. It was launched in February 2011.
In 2015, its founder Ross William Ulbricht was sentenced to life in jail, and certainly one of its directors, an Irish nationwide named Gary Davis, was jailed for six-and-a-half years in July 2019.
Zhong, in accordance with courtroom paperwork, executed a scheme in September 2012 to defraud Silk Highway by creating 9 fraudulent accounts on the platform and triggering over 140 transactions to plunder greater than 50,000 Bitcoin earlier than transferring the funds to quite a few wallets beneath his management.
Whereas every of the 9 accounts had an preliminary deposit that ranged anyplace between 200 and a pair of,000 Bitcoin, Zhong is estimated to have made a sequence of withdrawals in speedy succession with the objective of tricking Silk Highway’s processing methods into releasing extra crypto than was initially deposited.
On high of that, Zhong obtained 50,000 Bitcoin Money when bitcoin underwent a tough fork in 2017, all of which had been subsequently exchanged for a further 3,500 Bitcoin.
“Starting in or round March 2022, Zhong started voluntarily surrendering to the Authorities further Bitcoin that Zhong had entry to and had not dissipated,” the DoJ famous. “In whole, Zhong voluntarily surrendered 1,004.14621836 further Bitcoin.”
