The man who stole over 50,000 bitcoins from the Silk Road market has pleaded responsible. According to the U.S. Department of Justice, “the seizure was then the largest cryptocurrency seizure” within the historical past of the DOJ and “remains the department’s second-largest financial seizure ever.”
Silk Road Exploiter Pleads Guilty
The U.S. Department of Justice (DOJ) introduced Monday that James Zhong pleaded responsible on Friday “to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 bitcoin from the Silk Road dark web internet marketplace.” The Justice Department additionally introduced a “historic $3.36 billion cryptocurrency seizure” in connection to the case.
The DOJ defined that legislation enforcement carried out a search at Zhong’s home in Gainesville, Georgia, on Nov. 9, 2021, and “seized approximately 50,676.17851897 bitcoin, then valued at over $3.36 billion,” elaborating:
This seizure was then the most important cryptocurrency seizure within the historical past of the U.S. Department of Justice and at present stays the division’s second-largest monetary seizure ever.
Zhong additionally had about 3,500 extra bitcoins from exchanging into BTC over 50,000 bitcoin money (BCH) which he obtained following the bitcoin blockchain onerous fork in August 2017. He used an abroad cryptocurrency trade for the conversion.
Besides the BTC seized at his home, Zhong started “voluntarily surrendering to the government additional bitcoin” starting in March this 12 months, the DOJ revealed, including that “In total, Zhong voluntarily surrendered 1,004.14621836 additional bitcoin.”
The authorities is searching for the forfeiture of “approximately 51,680.32473733 bitcoin,” the DOJ famous. At the time of writing, BTC is buying and selling at $20,641.28, so the quantity sought by the federal government is about $1.07 billion.
Zhong’s Scheme to Defraud Silk Road Marketplace
Zhong executed a scheme to defraud the Silk Road market of its cash and property in September 2012, the DOJ stated, including that he “was able to withdraw many times more bitcoin out of Silk Road than he had deposited in the first instance.” For instance, the Justice Department detailed that on Sept. 19, 2012:
Zhong deposited 500 bitcoin right into a Silk Road pockets. Less than 5 seconds after making the preliminary deposit, Zhong executed 5 withdrawals of 500 bitcoin in speedy succession — i.e., throughout the identical second — leading to a internet achieve of two,000 bitcoin.
On Monday, the U.S. authorities filed an Amended Preliminary Order of Forfeiture within the United States v. Ross Ulbricht case “seeking to forfeit approximately 51,351.89785803 bitcoin traceable to Silk Road, valued at approximately $3,388,817,011.90 at the time of seizure.” Silk Road’s founder, Ross Ulbricht, was convicted in 2015 and is presently serving a double life sentence, plus 40 years with out parole.
U.S. District Judge Paul Gardephe additionally entered a Consent Preliminary Order of Forfeiture on Friday for 154.4268793000044 BTC, $661,900 in money, 25 Casascius cash (bodily bitcoin) price about 174 BTC, varied metals, and Zhong’s 80% curiosity in Memphis-based RE&D Investments LLC. The metals seized consisted of “four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin,” the Justice Department highlighted.
Following the DOJ’s announcement, some folks on social media started noticing that one among Zhong’s BTC addresses revealed in a court docket doc matches one posted by Bitcointalk consumer “Loaded.” Bitmex Research tweeted: “In March 2017, Bitcointalk user ‘Loaded’ signed a message from an address with 40,000 bitcoin, asking to do a 1 to 1 swap for ‘Bitcoin Unlimited’ with Roger Ver. It now appears these funds have been seized by the U.S. authorities.”
Commenting on Loaded’s Bitcointalk publish, Bitcoin.com founder Ver, said: “As I recall, he never replied to my DMs about making the bet.”
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