The authorities in the US are celebrating a major breakthrough in a decade-long mystery after a man admitted to stealing 50,000 Bitcoin from the notorious dark web marketplace Silk Road. This revelation comes after a raid on the home of James Zhong in Gainesville, Georgia, where law enforcement seized over 50,676 Bitcoin, worth nearly $3.4 billion at the time.
In addition to the massive cryptocurrency haul, investigators also confiscated $661,900 in cash, Zhong’s 80% stake in a real estate business called RE&D Investments based in Memphis, as well as various gold and silver bars. The seizure marks the largest crypto confiscation in the history of US law enforcement.
Zhong, 32, pleaded guilty to a single count of wire fraud dating back to 2012. His scheme involved exploiting a bug in Silk Road’s escrow system, allowing him to withdraw funds multiple times in rapid succession without actually listing any items for sale on the platform. The Department of Justice revealed that Zhong deposited between 200 and 2,000 Bitcoin across nine accounts and then conducted over 140 transactions to release the stolen 50,000+ Bitcoin.
After the initial theft, Zhong attempted to launder the ill-gotten gains by transferring them to various addresses under his control. Five years later, he lucked out when Bitcoin underwent a hard fork, resulting in an additional 50,000 Bitcoin Cash that he converted into 3,500 Bitcoin.
US Attorney Damian Williams praised the efforts of law enforcement in tracking down the missing Bitcoin, stating, “For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery. 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.”
Zhong now faces a maximum sentence of 20 years in prison for his involvement in the theft. This case serves as a testament to the relentless pursuit of justice, even in the realm of cryptocurrency crime.