US Announces ‘Historic $3.36 Billion Cryptocurrency Seizure’ as Silk Road Bitcoin Thief Pleads Guilty

The antheral who stole implicit 50,000 bitcoins from the Silk Road marketplace has pleaded guilty. According to the U.S. Department of Justice, “the seizure was past the largest cryptocurrency seizure” successful the past of the DOJ and “remains the department’s second-largest fiscal seizure ever.”

Silk Road Exploiter Pleads Guilty

The U.S. Department of Justice (DOJ) announced Monday that James Zhong pleaded blameworthy connected Friday “to committing ligament fraud successful September 2012 erstwhile helium unlawfully obtained implicit 50,000 bitcoin from the Silk Road acheronian web net marketplace.” The Justice Department besides announced a “historic $3.36 cardinal cryptocurrency seizure” successful transportation to the case.

The DOJ explained that instrumentality enforcement conducted a hunt astatine Zhong’s location successful Gainesville, Georgia, connected Nov. 9, 2021, and “seized astir 50,676.17851897 bitcoin, past valued astatine implicit $3.36 billion,” elaborating:

This seizure was past the largest cryptocurrency seizure successful the past of the U.S. Department of Justice and contiguous remains the department’s second-largest fiscal seizure ever.

Zhong besides had astir 3,500 much bitcoins from exchanging into BTC implicit 50,000 bitcoin currency (BCH) which helium received pursuing the bitcoin blockchain hard fork successful August 2017. He utilized an overseas cryptocurrency speech for the conversion.

Besides the BTC seized astatine his house, Zhong began “voluntarily surrendering to the authorities further bitcoin” opening successful March this year, the DOJ revealed, adding that “In total, Zhong voluntarily surrendered 1,004.14621836 further bitcoin.”

The authorities is seeking the forfeiture of “approximately 51,680.32473733 bitcoin,” the DOJ noted. At the clip of writing, BTC is trading astatine $20,641.28, truthful the magnitude sought by the authorities is astir $1.07 billion.

Zhong’s Scheme to Defraud Silk Road Marketplace

Zhong executed a strategy to defraud the Silk Road marketplace of its wealth and spot successful September 2012, the DOJ said, adding that helium “was capable to retreat galore times much bitcoin retired of Silk Road than helium had deposited successful the archetypal instance.” For example, the Justice Department elaborate that connected Sept. 19, 2012:

Zhong deposited 500 bitcoin into a Silk Road wallet. Less than 5 seconds aft making the archetypal deposit, Zhong executed 5 withdrawals of 500 bitcoin successful accelerated succession — i.e., wrong the aforesaid 2nd — resulting successful a nett summation of 2,000 bitcoin.

On Monday, the U.S. authorities filed an Amended Preliminary Order of Forfeiture successful the United States v. Ross Ulbricht lawsuit “seeking to forfeit astir 51,351.89785803 bitcoin traceable to Silk Road, valued astatine astir $3,388,817,011.90 astatine the clip of seizure.” Silk Road’s founder, Ross Ulbricht, was convicted successful 2015 and is presently serving a treble beingness sentence, positive 40 years without parole.

U.S. District Judge Paul Gardephe besides entered a Consent Preliminary Order of Forfeiture connected Friday for 154.4268793000044 BTC, $661,900 successful cash, 25 Casascius coins (physical bitcoin) worthy astir 174 BTC, assorted metals, and Zhong’s 80% involvement successful Memphis-based RE&D Investments LLC. The metals seized consisted of “four one-ounce silver-colored bars, 3 one-ounce gold-colored bars, 4 10-ounce silver-colored bars, and 1 gold-colored coin,” the Justice Department highlighted.

Following the DOJ’s announcement, immoderate radical connected societal media began noticing that 1 of Zhong’s BTC addresses revealed successful a tribunal papers matches 1 posted by Bitcointalk idiosyncratic “Loaded.” Bitmex Research tweeted: “In March 2017, Bitcointalk idiosyncratic ‘Loaded’ signed a connection from an code with 40,000 bitcoin, asking to bash a 1 to 1 swap for ‘Bitcoin Unlimited’ with Roger Ver. It present appears these funds person been seized by the U.S. authorities.”

Commenting connected Loaded’s Bitcointalk post, Bitcoin.com laminitis Ver, stated: “As I recall, helium ne'er replied to my DMs astir making the bet.”

What bash you deliberation astir this case? Let america cognize successful the comments conception below.

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