The Justice Department announced in 2012 the seizure of approximately 50,676 bitcoins (which a 32-year-old from Georgia had fraudulently obtained from The Silk Road)—known as the “Amazon of drugs”. Years ago, authorities seemed to be closing in for their vast cache of bitcoins, with James Zhong blamed for the crime on Friday, when authorities found bitcoins hidden in an underground safe and a popcorn “single-board computer”. Found on tin in the rest room closet, tailored a press release From DOJ.
Authorities confiscated bitcoin on November 9, 2021, saying it was worth over $3.36 billion at the time. Since then, the price has declined sharply; Now it is worth just over $1 billion. According to the press release, this is the government’s second-largest monetary seizure to date, up from just $3.6 billion in bitcoin seized earlier this year, allegedly belonging to TikToker/rapper/. Forbes Contributor Razzlekhan and her husband. (It’s worth noting that, in absolute terms, that seizure is related to a significantly higher number of bitcoins: about 95,000).
An IRS investigator in control of the case calls Zhong’s robbery “a sophisticated scheme” and says he had designed “a series of complex transactions” to cover up erroneously obtained bitcoins. According to the DOJ, in September 2012, it registered 9 fake accounts on The Silk Road, a Tor website designed to let people buy and sell drugs, weapons, hacking equipment, and other illegal goods and services on the Web. was. Zhong would then deposit 200 to 2,000 bitcoins into the account (at the time, the cryptocurrency was priced around $10–12 per coin) and then sends multiple withdrawal requests – usually up to 5 in a second. According to the DOJ, this exploit cheated him into returning the position several times, which he had initially accumulated.
Doing so emptied the Silk Road vault approximately 140 times – the position saved the maximum figure of 50,000 bitcoins readily available at a given time, according to a document filed by an IRS investigator, Zhong’s influence grew in 2017 when everyone who owned the cryptocurrency also bought another foreign money known as Bitcoin Cash, later cut from the original blockchain to become its own private entity. The DOJ says that Zhong traded his 50,000 bitcoin cash for 3,500 common bitcoins, including his assortment.
While the DOJ doesn’t go deep into how to track stolen bitcoins, part of what Zhong bought was a name given to police in 2019, According to protos, The report said he reported a housebreaking one, itemizing “a lot of bitcoins” among the many items he took. Apparently, the robbers missed several issues – although the IRS did not.
Earlier this year, Zhong’s lawyer handed over around 860 more bitcoins to the federal government, moving Silk Road founder Ross Ulbricht closer to his goal of collecting as much money as possible — hence the slight irony. Situation where Zhong is being prosecuted for committing wire fraud against a legal entity. According to the DOJ, he faces a maximum sentence of 20 years in prison and is due to be sentenced on February 20, 2023.