The heavy amount of illicit monetary resource ever recovered by Union law enforcement came in the form of bitcoin on a disconnected drive overgorge at the bottom of one Georgia military personnel ’s linen closet .
Federal prosecutorsannounced Mondaythey had retrieve $ 1.074 billion in bitcoin keep hidden by a Georgia man for just under a decade . The man in question , James Zhong from Gainesville , Georgia , allegedly tear off a massive heist from the sullen web drug market place Silk Road back in 2012 but kept the over 50,000 bitcoin in the most awkward home imaginable , on a humble reckoner in a “ popcorn canister ” under some blankets in his bathroom closet dependable . At the time the feds seized the crypto in 2021 , it was worth close to $ 3.36 billion .
The U.S. Attorney ’s office articulate that back in September of 2012 , when Silk Road was still going strong as the premiere elbow room to purchase drugs anonymously online , Zhong hatched a scheme to slip what was , at the fourth dimension , a few hundred thousand one dollar bill in crypto . Prosecutors spell the then - fraudster created nine fake accounts and occupy them with between 200 and 2,000 bitcoin , then blasted the Silk Road system with over 140 dealing in less than a second that stimulate it to discharge 51,680 bitcoin , which Zhong then sent to other bitcoin wallets he hold . agree to courtdocuments , he then ply some of that crypto through acrypto mixerto conceal where it come from .
The left image shows the safe where Georgia man James Zhong allegedly hid his stolen crypto. on the right includes images of Casascius coins, a physical representation of bitcoin that represents a certain amount of real bitcoin. Prosecutors said 25 coins were seized from Zhong’s home, as well as cash and the drive containing the stolen bitcoin.Screenshot: U.S. Attorney’s Office
Tyler Hatcher , a peculiar broker with the Internal Revenue Service ’s felonious investigation arm , said in the button that Zhong “ attempted to shroud his spoil through a series of complex proceedings which he hope would be heighten as he hid behind the mystery of the ‘ darknet . ’ ” U.S. Attorney Damian Williams said they used “ cryptocurrency trace and ripe erstwhile fashioned police study ” to find the investment company that remained obscure for nearly a decennary . While they do not go into the specifics on how they conducted the investigation , there have been other investigating that have managed to drop back thesesupposedly “ anon. ” crypto transactionsthrough notecase transfers and user activity tracking .
Prosecutors commit Zhong with wire fraud , and the human being pleaded guilty on Nov. 4 . He was release on a $ 310,000 bond that same day , according to court documents . In addition to all the digital assets seize by Union law enforcement , authorities also took around $ 661,900 in cash and some silver grey and amber bars from his dependable . Zhong was also forced to divest from some interest he hold in in a real estate ship’s company .
Of naturally , back then , bitcoin was still in its comparatively nascent point . The damage of the world ’s most pop cryptocurrency brood around $ 10 to $ 11 and closed at $ 13.45 at the end of that twelvemonth . It means his robbery was only a modest $ 500,000 in bitcoin that he apparently never offloaded . Since the price of bitcoin ballooned in late years , and even with the ongoing crypto wintertime , that few hundred thousand has turned into billion . One other early bitcoin investor , James Howells from the UK , has repeatedlytried to recoup suffer bitcoin from a landfillhe mined back in the other crypto twenty-four hours that is worth bounteous Pearl Sydenstricker Buck in today ’s marketplace .
The charges of wire fraud could mean up to 20 eld in prison , though Zhong ’s sentencing is n’t until February . Zhong ’s attorney , Michael Bachner of New York jurisprudence business firm Bachner and Associates , state Gizmodo in an email statement “ Mr. Zhong is extremely remorseful for his conduct that hap over 10 old age ago when he was just 22 years old . Mr. Zhong returned virtually all of the bitcoin he improperly acquire . Ironically , fall in the increase in bitcoin value over the last decade , the time value of the bitcoin he returned exponentially exceeded the value of the bitcoin he took . ”
Feds said they executed a hunting warrant on Zhong ’s home on Nov. 9 last class where they found a single dining table computer unplug from the cyberspace in an underground floor dependable “ submerged under blanket in a popcorn canister lay in in a privy W.C. . ” Though he kept the bitcoin in his personal wallets , when bitcoin executeda hard fork in 2017 , which demonstrate the newfangled bitcoin as well as Bitcoin Cash , Zhong invite an identical amount of the new cryptocurrency , which counted among feds ’ total take of crypto assets . According to the release , Zhong surrendered little more than 1,000 bitcoin that he had access to .
As noted by the U.S. Attorney ’s Office in thecourt text file , because Silk Road father Ross Ulbricht was convicted of operate the drug marketing surgery in 2015 , the Union government is making the apparent movement that Zhong ’s bitcoin is open to seizure after being involved in Ulbricht ’s money laundering charge . Though drug dealing with crypto was hit strong thanks to the loss of Silk Road , there areother , belittled dark vane operationsas well aslarger schemesstill taste to make money off anon. dealing .
Othercrypto heistsas of former have targeted DeFi labor and foil concatenation bridges , often squirreling away one thousand or millions of dollar in the summons , making Zhong ’s original 2012 heistlook like lemonade stand robbery in comparison , at least when the fraud was in the beginning discharge .
BitcoinCryptocurrenciesLaw , CrimeRoss UlbrichtSilk Road
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