$3.36 Billion In Stolen Bitcoin Is Recovered By The US Justice Department
Bitcoin worth billions of dollars have been recovered years after it was stolen off the “Silk Road” of the dark web. Wire fraud was used to Stolen Bitcoin Is Recovered (BTC) worth around $3.4 billion from the dark web marketplace Silk Road.
Recovered Billions In Bitcoin And Identification Of The Offender
The US Justice Department found about 50,680 BTC in a Georgia man’s residence at the beginning of November 2022. This was valued at $3.36 billion when it was stolen (in late 2021). Yet it was still worth $1 billion when the offender was caught. On November 4th, James Zhong, the perpetrator of this big crime, entered a guilty plea.
Police discovered many other priceless items during a search of Zhong’s residence. Including three one-ounce gold bars, 25 Casascius (physical Bitcoin) coins, and more than $660,000 in cash. The Silk Road on the dark web, which had just been in operation for around two years earlier, was eventually shut down by the FBI. Zhong’s involvement in this big crime was discovered more than nine years after the Silk Road came to an end.
The government is “seeking to forfeit, collectively: approximately 51,680.32473733 Bitcoin. ZHONG’s 80% interest in RE&D Investments, LLC, a Memphis-based company with significant real estate holdings; $661,900 in cash seized from ZHONG’s home. And various metals also seized from ZHONG’s home,” according to a statement from the US Department of Justice.
Zhong also had to turn over the remaining 1,004 BTC that he had not spent. This is equivalent to approximately $20 million now. Zhong may spend up to 20 years in jail for the wire fraud charge.
This event ranks very closely with the recovery of $3.6 billion in 2016 following the massive Bitfinex hack as the second-largest seizure of stolen cryptocurrency by the US authorities.
Zhong Made Use Of A Silk Road Flaw To Commit Theft
Zhong used a withdrawal processing bug to steal 50,680 Bitcoin by taking advantage of it. This allowed him to withdraw many times the number of Bitcoin he had initially put in.
Zhong Also Bought A Significant Amount Of Bitcoin Cash
Five years after the crime, Zhong still made money off of it thanks to the Bitcoin and Bitcoin Cash hard fork. After the Bitcoin blockchain split in 2017, a new blockchain called Bitcoin Cash with the native cryptocurrency BCH emerged.
Equal amounts of BCH were given to anyone who possessed BTC funds in this fork. Zhong was able to obtain an extra 50,680 in BCH. He later converted to BTC because he already had the 50,680 stolen Bitcoin.