U.S. Authorities Seize $1B Worth of Bitcoin from Silk Road Heist
Bitcoin Keys Were Stashed in Underground Safe and Devices
By: Tarang Khaitan •DeFi News
The U.S. Department of Justice said Nov. 7 that it seized more than 50,000 Bitcoin stolen from darkweb marketplace Silk Road a decade ago.
In November 2021, the authorities searched the home of one James Zhong and seized 50,676 BTC, worth over $3.4B at the time and about $1B today. The stash was found in an underground floor safe and on a “single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.”
On Nov. 4, Zhong pleaded guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.
“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,” said U.S. Attorney Damian Williams.
Along with the Bitcoin, law enforcement also seized various precious metals and cash found in Zhong’s residence in Gainesville, Georgia.
The current market value of the seized Bitcoin stands at roughly $1B. At the time, it was the largest financial seizure in the department’s history. However, February’s seizure of 94,000 BTC worth $4B related to the Bitfinex hack has pushed it into second place.
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According to authorities, Zhong created nine fraudulent accounts and made 140 transactions in quick succession in order to trick Silk Road’s withdrawal process into sending him over 50,000 BTC, which he subsequently withdrew to various addresses controlled by him.
Zhong began cooperating with authorities in March and has voluntarily given up 1,004 BTC. He is due to be sentenced on Feb. 22, 2023.