The United States Department of Justice (DOJ) claimed to have recovered $3.36 billion in stolen bitcoin assets, making it the second-largest recovery in history.
More than 50,000 bitcoins (BTC) were stolen from the home of a crypto hacker in the United States in 2021 after they were “unlawfully obtained” from the now-defunct illegal dark web market Silk Road.
After entering a guilty plea to one count of wire fraud on November 4, 2022, Gainesville, Georgia, resident James Zhong faces a maximum of 20 years in prison.
On November 7, 2022, the DOJ announced the recovery of the massive Bitcoin assets stolen in November 2021, claiming that the coins were linked to a “sophisticated scheme” to steal from the now-defunct Silk Road marketplace. In 2013, the Federal Bureau of Investigation (FBI) arrested the site’s creator, Ross Ulbricht, and eventually shut down the site.
The latest haul of 50,676 BTC was taken from bitcoin wallets associated with Zhong. In November 2020, the U.S. government seized $1 billion worth of bitcoin linked to the site. The computer equipment containing the digital assets was discovered in a hidden safe in the basement and a popcorn tin.
U.S. Attorney Damian Williams stated in a DOJ press release that “for almost 10 years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery.”
How the Theft Occurred
In addition to the $661,900 in cash, law enforcement discovered 25 Casascius coins (physical bitcoin), another 11.116 bitcoin, numerous silver, and gold-colored bars, and one gold-colored coin while searching Zhong’s home, according to the statement.
The statement claims that from 2011 to 2013, the Silk Road operated as a “darknet” black market where massive quantities of illegal drugs and other goods were sold. According to the statement, Zhong had stolen the bitcoin by setting up a series of about nine fraudulent accounts on the Silk Road.
According to the statement, Zhong used the fraudulent accounts to trigger 140 transactions “in rapid succession” to trick Silk Road’s systems into transferring the bitcoin to his accounts. He then moved the funds to several different accounts, leaving no paper trail.
The official statement reads, “thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. 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.”
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