US Seizes $3.4 Billion Worth of Bitcoins Linked to Silk Road

The United States law enforcement authorities have seized over 50,676 Bitcoins that were stolen from the notorious dark web marketplace, Silk Road, in 2012. The current market value of the seized Bitcoins is more than $1 billion, while the cryptos were worth over $3.36 billion during the search and seizure conducted in November 2021.

It was the second largest financial seizure by the US authorities following the forfeiture of $3.6 billion in stolen cryptocurrencies linked to the 2016 Bitfinex hack.

Announced on Monday, the massive amount of Silk Road-linked Bitcoins was obtained from the residence of Georgia-based James Zhong, who tricked the processing system of the darknet marketplace into getting the cryptocurrencies. Zhong has already pled guilty to the wire fraud charges and is now facing up to 20 years in prison.

Silk Road was an infamous darknet market marketplace that facilitated the sale of drugs, fake documents and all kinds of other illegal substances and services. The US government seized the platform in 2013, and its creator Ross Ulbricht was convicted in 2015. Ulbricht received life in prison for facilitating illegal drug sales and his appeal was rejected in 2017.

“For almost ten years, the whereabouts of this massive chunk of missing Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term had ballooned into an over $3.3 billion mystery,” said US Attorney, Damian Williams.

Running a “Sophisticated Scheme”

Earlier, media reports revealed that he claimed to be the President and CEO of a self-created Georgia-registered company, JZ Capital LLC. At the moment, Zhong’s social media accounts have been taken down. However, reports show that he claimed to have software development experience and is a “large early bitcoin investor with extensive knowledge of its inner workings.” He even posted photos of him with yachts and airplanes as well as at high-profile football games.

Zhong executed a 'sophisticated scheme' to steal bitcoin from Silk Road. According to the US Department of Justice, he created around nine fraudulent Silk Road accounts. He triggered more than 140 transactions in rapid succession to trick the processing system of the notorious marketplace.

He siphoned more than 50,000 Bitcoins from Silk Road and later, during the split of the Bitcoin community, received an equivalent amount of Bitcoin Cash, which he converted into Bitcoins.

The authorities uncovered the Bitcoins in Zhong’s possession stored in an underground floor safe and even on a single-board computer submerged under blankets in a popcorn tin stored in a bathroom closet. Law enforcement also seized $661,900 in cash, 25 Casascius coins worth 174 Bitcoin and over 11 additional Bitcoins. In addition, they recovered four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin.

Moreover, Zhong voluntarily surrendered more than 1,004 additional Bitcoins to the authorities.

“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,” Williams added. “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.”