The man who stole more than 50,000 bitcoins from the Silk Road market pleaded guilty. According to the U.S. Department of Justice, “the seizure was the largest cryptocurrency seizure in DOJ history at the time” and “remains the department’s second-largest financial seizure ever.”
Silk Road Confesses to Exploitative Crime
US Department of Justice (DOJ) announced On Monday, James Zhong was found guilty of “electronic fraud when he illegally bought more than 50,000 bitcoins from the Silk Road dark web internet market in September 2012” on Friday. The Department of Justice also announced a “historic $3.36 billion seizure of cryptocurrency” related to the case.
The Justice Department announced that law enforcement officers searched Zhong’s home in Gainesville, Georgia, on November 1. 9, 2021 and “approximately 50,676.17851897 seized bitcoins, then valued at over $3.36 billion”, he details:
This seizure was the largest cryptocurrency seizure in the history of the US Department of Justice at the time, and today remains the second largest financial seizure ever for the ministry.
Zhong also received about 3,500 more bitcoins from the exchange. BTC More than 50,000 bitcoin cash (BCH) following the bitcoin blockchain hard fork in August 2017. He used an overseas cryptocurrency exchange for the conversion.
beside BTC The DOJ announced that Zhong, who was seized at his home, began “voluntarily delivering additional bitcoins to the government” as of March this year, and that “In total, Zhong voluntarily delivered 1,004.14621836 additional bitcoins.”
The DOJ stated that the government wanted “approximately 51,680,32473733 bitcoins” to be confiscated. While writing, BTC It trades at $20,641.28, so the amount sought by the government is about $1.07 billion.
Zhong’s Plan to Defraud the Silk Road Market
The DOJ further added that Zhong had executed a scheme to defraud the Silk Road marketplace of money and property in September 2012, and was “being able to withdraw much more Bitcoin from Silk Road than he had invested in the first place.” For example, the Department of Justice detailed this in September. 19, 2012:
Zhong deposited 500 bitcoins into his Silk Road wallet. Less than five seconds after the initial deposit, Zhong quickly – so within the same second – made five withdrawals of 500 bitcoins, resulting in a net gain of 2,000 bitcoins.
On Monday, the United States government v. Ross Ulbricht filed for an Altered Preliminary Confiscation Order in his case “wanting to lose approximately 51,351,89785803 bitcoins traceable to the Silk Road and worth approximately $3,388,817,011.90 at the time of confiscation”. Silk Road founder Ross Ulbricht was convicted in 2015 and is currently in jail. to serve double life imprisonment plus 40 years without parole.
US District Judge Paul Gardephe on Friday 154.4268793000044 BTC$661,900 cash, 25 Casascius coins worth about 174 (physical bitcoin) BTC, miscellaneous metals, and Zhong’s 80% stake in Memphis-based RE&D Investments LLC. The Justice Department stressed that the metals seized consisted of “four one-ounce silver bars, three one-ounce gold bars, four 10-ounce silver bars and one gold coin”.
After the Ministry of Justice’s announcement, some on social media said that one of Zhong’s BTC The addresses revealed in a court document match the addresses published by Bitcointalk user “Loaded”. Bitmex Research tweeted out: “In March 2017, Bitcointalk user ‘Loaded’ signed a message with Roger Ver from an address with 40,000 bitcoins requesting a 1-to-1 exchange for ‘Bitcoin Unlimited’. Now these funds appear to have been seized by the US authorities.”
Commenting on Loaded’s Bitcointalk post, Bitcoin.com founder Ver said: “As far as I remember, he never responded to my DMs about placing bets.”
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